Analyze each situation and provide your assessment of the potential resolution of each scenario, including potential liability for the auditor or audit firm inveigled.

4. A lawsuit has been field against Carter Hockaday, CPA, charging him with constructive fraud in the audit of Broughton company's financial statements, Hocaday has examined all the audit documentation in his files and reviewed all relevant auditing standards. He is convinced that his audit fully complies with standards of the profession but is uncertain what he should use as his primary defense tactic.

5. Eastman Kodak field for bankruptcy in January 2012. A recent blog suggested that Kodak's external auditors should be sued for failing to qualify the firms's opinion on the financial statements issued before the bankruptcy, even though the fair presentation of the financial statements is not being disputed