Auditor professional negligence
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