Which of the Following Would Be Auditors' Most Likely Defense

question 12

Multiple Choice

Which of the following would be auditors' most likely defense in an action brought under the Securities Exchange Act of 1934?

• A) The investor did not have privity with auditors.
• B) The investor did not suffer a loss based on the materially misstated financial statements.
• C) The auditors acted in good faith and were not aware of the materially misstated financial statements.
• D) The financial statements were not filed with the Securities and Exchange Commission.

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Definitions:

Consumer Bill of Rights

A set of principles established to protect consumers in the marketplace, ensuring fair trade practices and product safety.

Ethics of Exchange

The moral principles that guide conduct and decisions in situations involving trading and transactions between parties.

Buyers and Sellers

Parties involved in the exchange of goods, services, or financial instruments in a marketplace.

Caveat Emptor

A legal principle that means "let the buyer beware," implying that it is the buyer's responsibility to perform due diligence before making a purchase.