• 1 Marks

AAA – Nov 2013 – L3 – A – Q7 – Auditor’s Legal Liability

This question tests understanding of actions that could result in criminal liability for an auditor.

An auditor will be criminally liable if he engages in the following, EXCEPT
A. Aiding a client to devise or execute crime
B. Agreeing with a client to conceal or destroy vital evidence
C. Advising a client to commit a criminal offence
D. Advising a client on steps to minimize tax liability taking advantage of the law
E. Assisting the client to commit an offence relating to money laundering

D. Advising a client on steps to minimize tax liability taking advantage of the law

Explanation:
Advising a client on legal ways to minimize tax liability is a legitimate and ethical service commonly provided by auditors and tax professionals, as it involves using lawful strategies to reduce tax obligations. The other options involve actions that are illegal and could lead to criminal liability for the auditor, including aiding in criminal activities, concealing evidence, advising on criminal acts, and assisting in money laundering.

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