National Bank was deciding whether to loan money to Pateo Corporation. It asked Pateo to provide a

Question:

National Bank was deciding whether to loan money to Pateo It asked Pateo to provide a copy of the company's most recent audit. While doing the audit, the auditors, Hamble & Humphries, failed to follow up on evidence indicating that one of the firm's managing partners might be siphoning money out of the corporation's funds. Relying on the audit, the bank made the loan. Six months later Pateo went into bankruptcy, primarily because one partner had stolen funds from the and had then fled the country. Can the bank bring an action against Hamble & Humphries? Why is your answer dependent on the state in which the case arose?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...