Which of the following is not a typical owed duty of care by auditors?

• A. Directors.
• B. The company.
• C. Shareholders as a whole.
• D. A bank with no special relationship.

Answer: (A)

The important idea here is who auditors owe a duty of care to. In practice, an auditor’s duty of care is aimed at those who rely on the financial statements to make decisions—the company itself and the shareholders as a whole. Directors are part of the governance and are involved in preparing and using the financial statements, so they don’t generally rely on the auditor’s report in the same way as external users like shareholders or lenders do. Unless there’s a special reliance or relationship, the auditor does not owe a personal duty of care to individual directors. That’s why the statement about directors being owed a typical duty of care isn’t aligned with how audit duties are normally framed.