Suppose you are a judge in the following civil case. Plaintiff Sue Bank, a banker, accuses auditor

Question:

Suppose you are a judge in the following civil case. Plaintiff Sue Bank, a banker, accuses auditor Big Zero of having performed a negligent audit in the financial statements of company ‘Trouble’. Five months after the financial statements (with an unqualified opinion) were published, ‘Trouble’ filed for bankruptcy, leaving the bank with unrecovered loans amounting to $20 million.

Required:

Describe the relevant issues to be addressed in this case.

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...