Section 11 of the 1933 Securities Act Uses the Term

question 52

Multiple Choice

Section 11 of the 1933 Securities Act uses the term "material fact" to limit the amount of information required. Under the Act, the standard used to determine the materiality of an item:

• A) is the auditor's professional judgment.
• B) has been established by the SEC as a percent of net income or of total assets.
• C) can be found in pronouncements of the FASB.
• D) is the average prudent investor.
• E) can be found in pronouncements of the AICPA.

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Definitions:

Real-World Stimuli

External inputs from the environment that can be perceived and interacted with in everyday life.

Eyewitness Memory

The recall of individuals who have witnessed a particular event or crime, concerning their ability to remember and report details accurately.

High Confidence

The strong belief or certainty in one's abilities, decisions, or correctness of information.

Jurors

Members of a jury, who are individuals selected to make a decision or find facts in legal proceedings.