In the Miller Energy Resources Case, the SEC Found That

question 5

Multiple Choice

In the Miller Energy Resources case, the SEC found that:

• A) Held the auditors were not liable because they exercised due care and professional skepticism.
• B) Held the auditors liable because they failed to gather sufficient, competent evidential matter to assess the value of assets on the financial statements.
• C) Held the auditors liable because they colluded with management to misrepresent the value of assets on the financial statements.
• D) The auditors were not liable because they met all professional standards.

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Definitions:

Fannie Mae

A government-sponsored enterprise (GSE) focused on expanding the secondary mortgage market by securitizing mortgages, enhancing liquidity in the financial system.

Freddie Mac

A public government-sponsored enterprise aimed at expanding the secondary mortgage market by buying loans from lenders.

Credit Standards

The criteria that lenders use to determine the creditworthiness of potential borrowers.

Sub-prime Loans

Loans offered to individuals with poor credit histories or higher risk of default, often at higher interest rates.