Which Statement Is Correct Concerning an Auditor's Statutory Legal Liability

question 17

Multiple Choice

Which statement is correct concerning an auditor's statutory legal liability?

• A)The Securities Act of 1933 broadened the auditor's common law liability and the Securities Exchange Act of 1934 narrowed it.
• B)The auditor has a greater burden of defense under the Securities Act of 1933 than under the Securities Exchange Act of 1934.
• C)Criminal liability only arises under state law.
• D)Statutory liability usually modifies the auditor's liability to the client.

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Definitions:

Core Principles

Fundamental beliefs or guidelines that serve as the foundation for a system, organization, or approach.

Honesty

The quality of being fair, truthful, and sincere in one's actions, communications, and business dealings.

Need Awareness Phase

The initial stage in the buying process where a potential customer recognizes they have a problem or need that could be satisfied by a product or service.