Question：Eve is an existing shareholder of Roundhead plc. After the publication of Roundhead plc's latest accounts which showed an increase in profit of 150% from the previous year she decides to invest a large amount of money in new shares. Six months later, Roundhead plc goes into liquidation. It is discovered that the company's auditors made several errors that caused a large loss to be presented as a very large profit.
　　Can Eve take action against the auditors for negligence?
　　A. No, as the business failure occurred some time after the publication of the accounts
　　B. No, the auditors do not owe her a duty of care
　　C. Yes, as an existing shareholder Eve is owed a duty of care by the auditors
　　D. Yes, as a direct causal link has been established
　　The correct answer is：no, the auditors do not owe her a duty of care.
　　Since the Caparo case, auditors do not owe a duty of care to the public at large and this includes existing shareholders increasing their stakes.