An auditor issued an unqualified opinion on financial statements that failed to disclose that a significant portion

Question:

An auditor issued an unqualified opinion on financial statements that failed to disclose that a significant portion of the accounts receivable was uncollectible. The auditor also failed to follow professional auditing standards with respect to inventory. The auditor knew that the client would use the financial statements to obtain a loan. The client subsequently declared bankruptcy. Under what concepts might a creditor, who loaned money to the client based on the financial statements, recover losses from the auditor?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

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