Halim & Associates, an audit firm, had audited the account of Aras Sdn Bhd. During the audit process they relied fully on the information given by the company's accountant and signed off the audit with the company's net asset listed as RM30 million. Jaya Group, which was eyeing to takeover Aras Sdn Bhd arranged for ameeting with the partners of Halim & Associates early this year. A representative of Jaya Group was assured that the audited accounts showed true and fair view of Aras Sdn Bhd's financial position. Jaya Group went ahead with its takeover of Aras Sdn Bhd. Jaya Group discovered that Aras Sdn Bhd was worth much less than indicated in the audited accounts. Jaya Group now is initiating a legal action against Halim & Associates. Halim & Associates contended that they were not liable to outsiders who relied on their audit report. Moreover, they have fulfilled their duties by placing full reliance on the company's accountant in the preparation of the company accounts and it was the accountant who had supplied them with incorrect information. Advise Jaya Group