What must a claimant show to prove loss caused?

• A. They suffered financial loss from the auditor's negligence.
• B. The auditor failed to issue a clean report.
• C. The client terminated the engagement.
• D. The audit was late.

Answer: (A)

To prove loss caused, you must show actual financial loss that was caused by the auditor’s negligence. In other words, there must be a direct link between the breach (negligence) and monetary harm—the loss would not have happened but for the auditor’s negligent act, and it must be measurable in financial terms. The breach alone isn’t enough; there needs to be a recoverable financial impact tied to relying on the auditor’s work or statements.

The other situations describe breaches (like not issuing a clean report or lateness) but they don’t by themselves prove the claimant suffered financial harm caused by that negligence. Without proven financial loss linked to the breach, the claim for loss fails.