ABC Bhd published its annual report for 2008 in April 2009. The report included the audited accounts for the year ended 31 December 2008, which indicated that the company had made substantial profi ts for 2008 and that the company was fi nancially sound. The auditors’ report which accompanied the accounts stated that the auditors were of the opinion that the company had observed accounting standards and that the auditors were satisfi ed that the accounts represented a true and fair view of the fi nancial position of the company as a whole.Relying on this report, Ali, a member of the public, purchased 100,000 shares of ABC Bhd, on the Stock Exchange.It has now been discovered that ABC Bhd was in fact insolvent at the time of the audit. This has resulted in the shares of the company becoming almost worthless. Ali considers that the auditors had not carried out their audit properly. He wishes to sue the auditors in the tort of negligence.Required:Advise Ali:
(b) whether he is likely to be successful in his claim against the auditors of ABC Bhd. (4 marks)
