Which of the Following Statements Is True of Misstatements or Omissions

question 1

Multiple Choice

Which of the following statements is true of misstatements or omissions of material facts in the information furnished by accountants for registration statements?

• A) An accountant is not liable to a purchaser of securities issued pursuant to a defective registration statement.
• B) An accountant's duty is to have a reasonable belief in the accuracy of the figures at the time the registration statement becomes effective.
• C) A purchaser can recover even if the accountant can demonstrate that the purchaser was aware of the misstatements or omissions in the registration statement before buying the securities.
• D) A purchaser cannot recover if he has not read the registration statement containing the material misstatements or omissions.

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Definitions:

Nonmembers

Individuals who are not affiliated with, or part of, a specific group or organization.

Emotional Worship

A form of religious practice that emphasizes the expression and experience of emotions and feelings in the connection with the divine.

Abstract Principles

Fundamental concepts or ideas that are not tied to any specific instances or material objects, often serving as the basis for reasoning or action.

Lower Classes

A segment of society with lower economic and social status, often associated with lower income and limited access to resources.