Ozine Corporation (OC) contacted the CPA firm of Gold & James to perform an audit of their financial statements. In arranging for the examination, OC clearly indicated that its purpose was to satisfy the Bridgewater Bank as to the corporations sound financial condition and to obtain an additional loan of $75,000 (it had previously obtained a $30,000 loan). Gold & James accepted the engagement, performed the examination without due care, and rendered an unqualified opinion. If an adequate examination had been performed, the financial statements would have been found to be misleading.OC submitted the audited financial statements to the Bridgewater Bank and obtained an additional loan of $50,000. The Bridgewater Bank refused to lend more than that amount. After several other banks also refused, OC finally was able to persuade Equity Bank, to lend the additional $25,000. The Equity Bank relied upon the financial statements examined by Gold & James.OC is now in bankruptcy, and the Bridgewater Bank seeks to collect from Gold & James the $80,000 it loaned OC, as well Equity Bank seeks to recover from Gold & James the $25,000 it loaned OC.

Required:

a) Will the Bridgewater Bank be able to recover from Gold & James? Explain

b) Will the Equity Bank be able to recover from Gold & James