Company Law Essay Example | Topics and Well Written Essays - 1500 words - 5

Company Law - Essay Example A client and an auditor are usually in a contractual relationship thus meaning that the two parties are in agreement. The auditor thus have to perform their share of bargain carefully and appropriately as stipulated in the contract. If the auditor does not conform to the contract terms, the client can decide to sue based on the rounds of breach of contract. According Lacy, a client can sue the auditor first, due to the failure to accomplish specific performance, secondly, in the case where there is general monetary costs and damages for losses incurred due to the breach of that contract and lastly, any other consequential damages that as a result of negligence, have occurred (2002, p.78). Therefore, basing from these factors, Benard being the auditor of NASDAQ Composites Plc is highly liable. During auditing, before partaking any work for a client, the auditor or accountant should ensure that the particular duties to be executed, and in precise if there is need for any important matters to be excluded, have been discussed and harmoniously agreed with the client usually through written word or through a letter of engagement or otherwise (Delaney & Whittington 2010, p. 135). This therefore implies that before any of the undertakings is assumed, there is need for the auditor to ensure that there is special written evidence. In Re Thomas Gerrard & Son Ltd (1968) UK, the company’s auditors learned that there were various alteration to some of the invoice dates of the company. The company’s auditors then referred and consulted with the managing director of this corporation and accepted the director’s explanation although they did not scrutinize the statements of the related suppliers. As a result, there were loss of money to the company and it was thus ruled out that the auditors had breached their duty required by the company at the instance when they failed critically to examine the statements. The facts of the