Brady, a CPA, is hired by Stanlee Inc., to audit its financial statements. Due to his negligence, Brady fails to discover that Tom, chairman of the board of directors of Stanlee, has embezzled $300,000 of the company funds. Brady finishes the audit and issues an unqualified opinion. Six months later, Brady reads in the newspapers that Tom has been caught for embezzling a total of $800,000 of company funds. Tom has resigned and the company funds have been fully recovered from him. Stanlee sues Brady. How much is Brady liable for?

a. $800,000

b. $300,000

c. $1,100,000

d. $500,000