Which of the Following Statements Regarding Auditors' Liability Under the Securities

question 88

Multiple Choice

Which of the following statements regarding auditors' liability under the Securities Act of 1933 is not true?

• A) The act relates to the initial issuance of securities to the public, normally through an initial public offering.
• B) Auditors' liability arises because of audited financial information filed with the SEC.
• C) Third parties must demonstrate that they relied on misstated financial statements that were examined by auditors.
• D) Auditors may be liable if they are found to have engaged in ordinary negligence.

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Definitions:

Communist System

A political and economic ideology aiming for a classless society where all property is publicly owned and each person works and is paid according to their abilities and needs.

State-Owned Enterprises

Businesses or entities that are owned and operated by a government.

Mikhail Gorbachev

The last leader of the Soviet Union, known for his policies of glasnost (openness) and perestroika (restructuring).

Private Ownership

The legal right of individuals or entities to own property, assets, or businesses without governmental intervention.