The Private Securities Litigation Reform Act of 1995 Provides That

question 42

True/False

The Private Securities Litigation Reform Act of 1995 provides that an auditor can be held liable in a private action for any finding, conclusion, or statement expressed in the report the Act requires the auditor to make to the SEC.

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Definitions:

Percent of Receivables Method

An accounting method used to estimate the amount of a company's receivables that will not be collected.

Bad Debts Expense

The portion of accounts receivable that a company does not expect to collect, recognized as an expense in financial accounting.

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collected, which is used to reduce the total accounts receivable balance.

Cash Loan

A sum of money borrowed that must be paid back with interest.