The Private Securities Litigation Reform Act of 1995 Requires an Auditor

question 44

Multiple Choice

The Private Securities Litigation Reform Act of 1995 requires an auditor to:

• A) report to the Securities and Exchange Commission a client's illegal act that has a material impact on the financial statements of the client when the client has failed to take remedial action.
• B) resign from an audit engagement when the client commits an illegal act that has a material impact on the financial statements of the client and the client has failed to take remedial action.
• C) inform a client's shareholders of the client's illegal act that has a material impact on the financial statements of the client when the client has failed to take remedial action.
• D) force a client to disclose to its shareholders and to the Securities and Exchange Commission a client's illegal act that has a material impact on the financial statements of the client when the client has failed to take remedial action.

---

Definitions:

Glocalization

A strategy that involves adapting a product, service, or content to suit local tastes and cultures while maintaining an overarching global appeal.

Centre-Periphery Trade

The exchange of goods and services between central, more economically developed areas and peripheral, less developed areas, influencing economic dynamics.

Global Markets

The international trading landscape where goods, services, currencies, and information are exchanged across national borders.

Globalization

The process of integration and interaction among people, companies, and governments worldwide, leading to the global exchange of products, ideas, and cultural practices.