If a Plaintiff Is Successful in Proving That an Auditor

question 37

Multiple Choice

If a plaintiff is successful in proving that an auditor has violated Section 10(b) of the 1934 Act,the auditor has:

• A) primary liability.
• B) secondary liability.
• C) contingent liability.
• D) rebuttable liability.

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales. Examples include rent, salaries, and insurance premiums.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs of goods sold or raw material expenses.

Break-Even Revenue

The amount of income needed to cover all operating expenses, with no profit or loss.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.