Which of the Following Is False Regarding the Private Securities

question 28

Multiple Choice

Which of the following is false regarding the Private Securities Litigation Reform Act?

• A) The act sets forth a specific set of actions and guidelines an accountant must follow after identifying a potentially illegal activity when conducting an audit.
• B) The act makes no reference to notifying the SEC of wrongdoing although it does reference notifying the applicable company's board of directors.
• C) The act states that accountants are liable for the portion of the damages for which they are responsible.
• D) In the event of a willful violation of the act, the SEC can seek an injunction against the accountant.
• E) Under the act, an accountant's silence when the accountant thinks he or she might have discovered fraud is enough to constitute aiding and abetting.

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Definitions:

Permanent Change

An alteration or modification in processes, behavior, or systems that is intended to last indefinitely, without reversal to original state.

Conversion Theory

A theory suggesting that minority views can influence and ultimately change the majority opinion under certain conditions.

Moscovici

Serge Moscovici is a social psychologist known for his work on social influence and the theory of social representations.

Indirect Impact

Effects or outcomes that are not directly caused by an action or event, but occur as a secondary result.