Under the Private Securities Litigation Reform Act of 1995,those Who

question 16

Multiple Choice

Under the Private Securities Litigation Reform Act of 1995,those who audit financial statements required by the 1934 Securities Exchange Act must establish procedures capable of:

• A) detecting material illegal acts.
• B) identifying material related to party transactions.
• C) evaluating whether there is a substantial doubt about the issuer's ability to continue as a going concern during the next fiscal year.
• D) All of these.

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Definitions:

Portfolio Diversification

A strategy for managing risk that involves diversifying a portfolio with a broad range of investments to reduce the effect of the performance of any individual asset.

Security

A financial instrument that represents ownership (stocks), a creditor relationship (bonds), or rights to ownership (options) that can be bought and sold.

Expected Return

The weighted average of the probable returns of an investment, considering all possible outcomes and their likelihoods.

Standard Deviation

A statistical index that measures how much data values deviate from each other within a dataset.