11) James Electronics is interested in purchasing Dyner Corp. Prior to the purchase James hired Prime CPA to audit the financial statements of Dyner. During the audit, Prime CPA failed to discover a fraud that resulted in material misstatements in Dyner's financial statements. After the acquisition, the fraud was discovered and James Electronics suffered substantial losses. If James Electronics sues Prime CPA, James Electronics must prove that Prime CPA:

-acted recklessly or with lack of reasonable grounds for belief.

-knew of the instances of fraud

-failed to exercise the appropriate level of professional care.

-demonstrated gross negligence.