In Order for a Plaintiff to Recover Against an Auditor

question 51

Multiple Choice

In order for a plaintiff to recover against an auditor under the 1933 Securities Act, he or she must normally prove:

• A) reliance on the financial statements.
• B) gross negligence on the part of the auditor.
• C) the financial statements were materially false or misleading.
• D) ordinary negligence on the part of the auditor.
• E) reliance, misleading statements and ordinary negligence.

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Definitions:

Validity Generalization

A statistical approach that suggests the validity of a test in one context can extend to other contexts, simplifying the validation process of selection instruments.

Criterion-Related Validation

The process of validating how well a test or assessment predicts outcomes based on established criteria.

Past Behavior

Previous actions or conduct of an individual, often analyzed to predict future behavior.

Content Validation

The process of evaluating the relevance and coverage of test items to ensure they accurately measure the desired construct.