The topic for this is Accountants, Liability and Mal Practice

1. John Smith had successful business which he wanted to expand and needed extra funding. He was advised by bank that he needed an audit of his business to determine if his preSent business was profitable. John hired ABC accounting agency to audit his business they we given instructions to determine the level of profit made and if there was any fraudulent activity by staff members. ABC audit revealed that the company was highly profitable and there was no fraud by staff members. John was able get a loan from the bank based on ABC audit report. John experience financial difficulties one year after he received the loan. John a new audit done by XYZ accounting agency for the same period of ABC audit and it revealed that the company was not protable and that the staff was issuing false invoices. Advise John if he can take any action against ABC