Under the Liability Provisions of Section 11 of the Securities

question 10

Multiple Choice

Under the liability provisions of Section 11 of the Securities Act of 1933, a CPA may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the security's registration statement. Under Section 11, which of the following must be proven by a purchaser of the security?

• A)The CPA committed fraud and the purchaser relied on the financial statements.
• B)The purchaser relied on the financial statements, but not that the CPA committed fraud.
• C)The CPA committed fraud, but not that the purchaser relied on the financial statements.
• D)Neither that the CPA committed fraud, nor that the purchaser relied on the financial statements.

---

Definitions:

Emotional Connection

A bond formed between individuals based on shared feelings, empathy, or emotional experiences, enhancing mutual understanding and support.

Trust

Confidence in the reliability, integrity, and abilities of individuals or institutions, instrumental in facilitating cooperation and social cohesion.

Negotiation Process

The series of steps or stages involved in attempting to reach an agreement between two or more parties with differing objectives.

Outline Goals

Preliminary or skeletal goals that provide a general direction without detailing the steps necessary to achieve them.