Richard, an auditor, prepared a financial report for Stevenson & Co. Ltd ("Stevenson"). Thomas, a business tycoon asked Sarah, a Human Resources Manager at Stevenson concerning the financial status of the company.Sarah told Thomas that Stevenson made a huge profit last year and had just signed a profitable contract with another company. Sarah also gave a copy of the financial report to Thomas. Thomas was busy with work and he did not bother to read the financial report of Stevenson. Thomas trusted Sarah's words and he invested heavily into Stevenson. As a result, Thomas lost HK$500,000 in this transaction.

It turned out that the financial report prepared by Richard did reflect the true financial status of Stevenson. The report clearly stated that Stevenson traded at a loss. If Thomas had read the report, he would have found out the true financial position of Stevenson.

Advise Thomas.