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An auditor issued an unqualified opinion on financial statements that failed to disclose that a significant portion of the accounts receivable was uncollectible. The auditor also failed to follow professional auditing standards with respect to inventory. The auditor knew that the financial statements would be used to obtain a loan. The client subsequently declared bankruptcy. Under what concepts might a creditor, who loaned money to the client on the basis of the financial statements, recover losses from the auditor?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91874545

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