Locke, CPA, was engaged by Hall Inc. to audit Willow Company. Hall purchased Willow after receiving Willows

Question:

Locke, CPA, was engaged by Hall Inc. to audit Willow Company. Hall purchased Willow after receiving Willow€™s audited financial statements, which included Locke€™s unmodified auditors€™ opinion. Locke was negligent in the performance of the Willow audit engagement; this negligence was caused by failure to perform the engagement in accordance with terms of the engagement letter. As a result of Locke€™s negligence, Hall suffered damages of $ 75,000. Hall appears to have grounds to sue Lockefor