Question $11(4$ points$)$

An auditor knew that the purpose of her audit was to render reasonable assurance

on financial statements that were tq be used for the application for a loan; the

auditor did not know the identity of the bank that would eventually give the loan.

Under the Restatement of Torts approach to liability, the auditor is generally liable to

the bank which subsequently grants the loan for:

Lack of due diligence.

Lack of good faith.

Ordinary negligence, but not gross negligence.

Either ordinary or gross negligence.

Gross negligence, but not ordinary negligence.