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Auditor professional negligence

By David Scrivener
19th Feb 2015

Ensors were engaged by the claimant to provide an expert report on whether the audit was in accordance with the standards of a reasonably competent auditor and to quantify the loss arising. In our report we identified substantial failings in the audit such that the financial statements contained a material misstatement and substantiating a resulting loss in excess of £10m. 

Errors identified included:

  • A failure to demonstrate appropriate professional scepticism, A failure to set and use an appropriate materiality level which then undermines the whole audit process; 
  • A failure to follow the firm’s audit guidelines and manual; 
  • A failure to investigate errors arising in the sample during audit testing; 
  • A failure by the audit partner to investigate questions or review points raised by audit team members; and 
  • A failure to adequately audit the going concern assumption upon which financial statements are normally based