Sun Corp.approved a merger plan with Cord Corp.Among the determining factors in approving the merger was Cord's financial statements audited by Frank & Co.,CPAs.Sun had engaged Frank to audit Cord's financial statements.While performing the audit,Frank failed to discover certain irregularities that later caused Sun to suffer substantial losses.For Frank to be liable under common law liability,Sun at a minimum must prove that Frank

Question

Quizplus · Accepted Answer

In order for Frank & Co., CPAs to be liable under common law liability, Sun must prove that they failed to exercise the appropriate level of professional care. This is typically known as negligence, and it is the most commonly used standard in cases like this. Sun does not need to prove that Frank knew of the irregularities, demonstrated gross negligence, or acted with scienter, as these are not necessary elements for a negligence claim.

Sun CorpApproved a Merger Plan with Cord Corp