Subject: Auditing and Assurance

You have been the auditor of Toys Ltd for two years. Your auditor's report for Toys for the year ended 30 June 2018 was unmodified, indicating that in your opinion the financial report gave a true and fair view. In August 2018, Toys obtained a large loan from Faraway Bank Ltd, to provide additional working capital. Subsequently Toys suffered several trading difficulties and was placed into liquidation in late December 2018 , with insufficient funds to repay the loan to Faraway Bank. Required Outline the defense for your audit firm to any legal action taken by Faraway Bank to recover its loss