Which of the Following Would Not Need to Be Demonstrated

question 3

Multiple Choice

Which of the following would not need to be demonstrated by third parties bringing suit against auditors for losses sustained under the Securities Act of 1933?

• A) Auditors were aware of the materially misstated financial statements.
• B) Third-party purchasers suffered a loss.
• C) The client's financial statements contained a material misstatement.
• D) Purchasers would need to demonstrate all of these.

---

Definitions:

Operations Charts

Graphical representations used in business and engineering to outline the steps involved in a process or a system, highlighting interactions and workflows.

Formal Structures

The officially designated channels of communication and authority within an organization, typically outlined in organizational charts and manuals.

Line Units

Are workgroups that conduct the major business of the organization.

Accounting

The systematic recording, analyzing, and reporting of financial transactions pertaining to a business.