Under the Liability Provisions of Section 11 of the Securities

question 119

Multiple Choice

Under the liability provisions of section 11 of the Securities Act of 1933,auditors may be liable to any purchaser of securities for certifying materially misstated financial statements that are included in the registration statement.Under section 11,which of the following must a purchaser of the security prove?

• A) Reliance on financial statements, yes; fraud by auditors, yes.
• B) Reliance on financial statements, yes; fraud by auditors, no.
• C) Reliance on financial statements, no; fraud by auditors, yes.
• D) Reliance on financial statements, no; fraud by auditors, no.

Understand the regulations surrounding advertising and labeling, including those enforced by the FTC and FDA.

Appreciate the significance of specific consumer protection acts, such as the Telephone Consumer Protection Act and the Flammable Fabrics Act.

Understand international trade agreements’ impact on product labeling and consumer protection.

Understand the rights and protections provided to consumers under various consumer protection laws.

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Definitions:

Cost of Goods Sold

An expense measured as the total direct costs attributable to the production of goods sold by a company.

Departments

Distinct divisions within a company or organization designated to handle specific tasks or functions, such as sales, marketing, or human resources.

Catering Department

A division within a company or a facility that is responsible for providing food services for events, meetings, and functions.

Profit Center

A segment or division of a company that is directly responsible for generating its own revenue and profit.