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An auditing firm completed and audit of a corporation's financial statements and the auditors failed to detect significant misstatements in reporting income and asset value

An auditing firm completed and audit of a corporation's financial statements and the auditors failed to detect significant misstatements in reporting income and asset value due to a carefully constructed scheme of misleading transactions. The corporation filed for bankruptcy and the auditors were sued for negligence. What are some of the defenses that the auditor firm might use in the court case?

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