If an auditor does something wrongfully in the performance of his duties resulting in financial loss to the company, he will be held guilty of

If an auditor does something wrongfully in the performance of his duties resulting in financial loss to the company, he will be held guilty of misfeasance.

Key PointsLiabilities of an Auditor:

An auditor's liability is typically based on the work he performs as a professional accountant, and he must carry out his duties with care, caution, and diligence. The nature of an auditor's liabilities is as follows:

• Civil liability
• Liabilities under Companies Act
• Criminal liability under IPC
• Liability under Income Tax Act
• Liabilities for professional misconduct
• Liability towards third party

Important Points

Civil Liability:

Liability of Misfeasance:

• Misfeasance is the legal word for a non-criminal act that injures someone else.
• The person who mistakenly harms you must, in most situations, be under contract to provide care. If you asked a stranger on the street for advice on how to begin a new workout regimen and were injured, the stranger would not be held liable. It would be a different thing if you met with the same individual in a gym and hired that person as your personal trainer.
• In civil litigation, the legal term misfeasance is used because there is no violation of a law or statute.

Liability of Negligence:

• The word "negligence" simply implies "carelessness." In a legal sense, it underlines the failure to exercise the fundamental level of care that a reasonable person should exercise in all instances.
• Negligence is a mode in which a variety of harms might arise due to a failure to take appropriate safeguards.
• Negligence is the most common type of civil liability.