A CPA Firm Has Audited the Financial Statements Included in a Form

question 35

Essay

A CPA firm has audited the financial statements included in a Form S-1 filed with the SEC under the Securities Act of 1933.Shortly thereafter,the company went bankrupt and a class action lawsuit was filed by the initial investors against the CPA firm.
a.What should the plaintiff investors attempt to prove?
b.Must the plaintiffs prove that they relied on the financial statements included in the Form S-1?
c.What must the CPA firm prove in order to be successful with respect to the firm's defense?

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Definitions:

Quantity Demanded

Quantity demanded is the total amount of a good or service that consumers are willing and able to purchase at a given price over a specified period.

Demand Schedule

A tabular representation showing the quantity of a good that consumers are willing and able to purchase at different prices, holding other factors constant.

Excise Tax

A tax directly levied on certain goods, services, or activities, often included in the price of the product.

Improved Technology

Advances or enhancements in technology that lead to better efficiency, productivity, or outcomes in various fields.