Fraud and Co, a firm of accountants and auditors, were employed to prepare the accounts and balance sheet of Apple plc, knowing the accounts were to be sent to Bill, a private investor, who was thinking of buying a majority shareholding in Apple plc. The accounts were negligently prepared and showed the company as financially stable, whereas in fact the opposite was true and the company had large debts outstanding. Bill showed the accounts to his friend Richard. Bill purchased £500,000 worth of shares and Richard purchased £200,000 worth of shares. Within six months, Apple plc went into liquidation and both Bill and Richard lost their investments.
Advise Bill and Richard on the likelihood of them succeeding in their actions against Fraud and Co.