Sun CorpApproved a Merger Plan with Cord Corp

question 28

Multiple Choice

Sun Corp.approved a merger plan with Cord Corp.One of the factors that led to the approval of the merger was the fact that the Cord's financial statements were audited by Frank
& Co.CAs.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 the lawsuit to be successful, Sun must prove that Frank & Co., CAs

• A)Knew of the irregularities.
• B)Failed to exercise due care.
• C)Was grossly negligent.
• D)Acted with scienter.

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Definitions:

Debtor

An individual or entity that owes money or is in debt to another party.

Composition Agreement

An arrangement between a debtor and their creditors in which the creditors agree to accept a partial payment in satisfaction of the debts owed.

Creditors

Creditors are individuals or entities that are owed money by another entity or individual, known as a debtor.

Debtor

A person, company, or country that owes money.