Audit failure

Audit failure occurs when an auditor deviates from the applicable professional standards in such a way that the opinion contained in his or her audit report is false. Audit failures are frequently associated with inadequate auditor training, failure to exercise sufficient professional skepticism in evaluating management representations, not sufficiently evaluating client valuation estimates, essentially not engaging in any auditing activities at all, and/or creating inadequate audit documentation.

Related Courses

Guide to Auditor Legal Liability