Question

From the list of items and provided, categorized each item in the table below as either a factor that relates to contract law or tort law. > List of items: 1. Auditor failed to take reasonable care in the performance of the audit. Auditor fails to live up to their responsibility implicit in agreeing to act as the auditor and explicit in 2. the engagement letter. The work was below the standard that may be reasonably expected from a designated public accountant. The injured party must prove that the auditor's carelessness or unintentional behaviour caused harm 4. and therefore breached the duty of care. 5. A client can sue the auditor for breach of contract. 3.

Answer 1

1) Under tort of negligence
2) Under contract law
3) Under tort of negligence
4) Under tort of negligence
5) Under contract law

Explanation: Under contract law the client would sue auditor for if the auditor has not performed up to their responsibility thus causing a breach of contract. The action can be an implicit as an agreement to act and explicit in the engagement letter as the auditor.
Under tort of negligence injured party would be required to prove that the unintentional behaviour of an auditor lead to harm and caused a breach on the duty of care. It often occurs when work was not according to the standard expected from a designated public accountant.