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Outline a defense for your audit firm

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Question - You have been the auditor of Data Ltd for two years. Your auditor's report for Data for the year ended 30 June 2018 was unmodified, indicating that in your opinion the financial report gave a true and fair view. In August 2018, Data obtained a large loan from Better Bank Ltd, to provide additional working capital. Subsequently Data suffered severe trading difficulties and was placed into liquidation in late December 2018, with insufficient funds to repay the loan to Better Bank.

Required - Outline a defense for your audit firm to any legal action taken by Better Bank to recover its loss.

Reference no: EM132559641

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