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Wanda Young, doing business as Wanda Young Fashions, engaged the CPA partnership of Scott & Green to audit her financial statements. During the audit, Scott

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Wanda Young, doing business as Wanda Young Fashions, engaged the CPA partnership of Scott \& Green to audit her financial statements. During the audit, Scott \& Green discovered certain irregularities that would have indicated to a reasonably prudent auditor that James Smith, the chief accountant, might be engaged in a fraud. However, Scott \& Green, not having been engaged to discover defalcations, submitted an unqualified opinion in its report and did not mention the potential defalcation problem. What are the legal implications of the above facts as they relate to the relationship between Scott \& Green and Wanda Young? Explain. Page 144

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