Starr Corp

Starr Corp. approved a plan of merger with Silo Corp. One of the determining factors in approving the merger was the strong financial statements of Silo which were audited by Cox & Co., CPAs. Starr had engaged Cox to audit Silo's financial statements. While performing the audit, Cox failed to discover certain instances of fraud which have subsequently caused Starr to suffer substantial losses. In order for Cox to be liable under common law, Starr, at a minimum, must prove that Cox:

A) Acted recklessly or with lack of reasonable grounds for belief.
B) Knew of the instances of fraud.
C) Failed to exercise due care.
D) Was grossly negligent.