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AUDITOR'S LEGAL LIABILITY
Mr. Raju performed an audit of Dream Supermarket Limited for the year ended 31st December 2018 and issued an unqualified opinion without any 'emphasis of matter paragraph.' The audit was performed in accordance with the generally accepted auditing standard and the code of professional conduct with an emphasis on due care. Raju was satisfied with all the disclosures in the financial report of Dream Supermarket Limited. The audit was completed on 25 March, 2019. On 10 April, 2019, the Company's loan application for $8,000,000 was approved by the Friendly Commercial Bank of Fiji. On 5 August, 2019, it came in the newspaper that the company had been declared insolvent as it was facing operating hardship.
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Problem 1: What is your view on the audit opinion issued by Raju based on the information given above? Provide justifications.
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