Auditing European Accounting Review

Question: Discuss about the Report for Auditing of European Accounting Review. Answer: It can be observed from the given scenario that the directors of the insurance company feloniously used the funds obtained from the general public by possessing policies of annuity rates so that the public can be exploited with current annual rate policies. With reference to the case law of Equitable Life Assurance Society -v- Bowley and others it can be seen that the directors of the society had evaluated the final bonuses that was to be allocated to the policyholders in such a manner that was found to be opposite as per the terms and conditions of the policy. The House of Lords unanimously discussed that there was an implicit term in the Articles of Association such that the directors of the society could not exert their discretion in the way they had as it overpowered the expectations of the GAR policyholders as represented by Equitable. After the judgement passed by the House of Lords, the society was then put to an end. Although the GAR policyholders were not insolvent, yet the UK government came up with a compensation policy for their benefit under the Equitable Life (Payments) Act 2010. By referring to such case law, it can be concluded that the insurance company was completely dishonest and for partnership determination whether liable or not, Anderson can cite such case. The case of Therapy Partners of America Inc v. Health Providers, Inc. can be mentioned when it comes to partnership being accountable to the creditors. When it comes to a declaratory judgment it can be said that the court must ascertain whether any controversy exists between the parties and whether it is of justifiable in nature. It can be witnessed from this case that the declaratory decision can be defended by partnership and therefore it can surely take a stand. For proper reference, Anderson can take a look at this case and hence can find a better view of the total scenario (Hoffelder, 2012). Negligence implies failure to exercise due care that a reasonably prudent individual would have exercised in specific circumstances. In terms of law, negligence implies a civil wrong whereby a party or a person is in breach of legal responsibility of care to another that results in injury or loss to the claimant. Negligence can either be unintentional or intentional but any kind of ignorance cannot be made righteous in order to avoid legal proceedings. Matters like providing of inaccurate information and unlawful claims that mislead an individual are negligence (Christensen, 2011). Therefore, it can surely be considered that if an act of negligence has caused loss or harm to others, then the negligent person is liable for legal proceedings to be initiated against him. When it comes to companies, negligent acts are highly punishable because such companies comprise of funds obtained from the public. Hence, such companies are responsible to undertake precautions like due diligence befor e any relevant activity so that future problems can be prevented. For negligence to occur in an activity, two conditions must be satisfied that is there must be a responsibility to be fulfilled and the individual liable to fulfill it must have contravened it. Whenever any breach has occurred by the defendant for any responsibility owed to the plaintiff, he is accountable for an act of negligence. Such breach can occur when the defendant does not undertake proper and due care in order to fulfill the responsibility. Whether a breach has occurred or not and whether there are elements like responsibility to be fulfilled in an activity is present or not shall be decided by the court jury (Heeler, 2009). Furthermore, the plaintiff is also liable to prove to the jury that if any loss or injury has been sustained by him because of the negligence of defendant. Then is the element of a proximate cause where the loss or injury sustained by the plaintiff due to the defendants negligence is greater than the loss or injury anticipated by him. On such matters, the plaintiff cannot prove to the jury that the defendants activities were the proximate cause of loss or injury to the plaintiff (Gilbert et. al, 2015). Next is the element of damage where the plaintiff is liable to prove to the jury the conformity of loss or injury sustained by him. Lastly is the element of a professional, unbiased and qualified lawyer who can present claims infront of the jury in order to win the case. An expert lawyer can turn the unfavorable circumstances in favor of the client. References Christensen, J. (2011). Good analytical research. European Accounting Review, 20(1), 41-51 Gilbert, W. Joseph J and Terry J. E. (2005). The Use of Control Self-Assessment by Independent Auditors. The CPA Journal, 3, 66-92 Heeler, D. (2009). Audit Principles, Risk Assessment Effective Reporting. Pearson Press Hoffelder, K. (2012). New Audit Standard Encourages More Talking. Harvard Press.