Under Section 11(b)of the Securities Act of 1933,if Auditors Can

question 105

Short Answer

Under section 11(b)of the Securities Act of 1933,if auditors can prove that a reasonable investigation was performed (e.g.,an audit conducted in accordance with __________________________________________,they are not liable for damages.

---

Definitions:

Gross Profit Method

An inventory costing method to estimate the cost of goods sold and ending inventory, which calculates gross profit by subtracting the cost of goods sold from net sales.

FIFO Method

"First In, First Out," an inventory valuation method assuming that the first items purchased are the first ones sold, affecting the cost of goods sold and inventory value.

Cost Flow Method

An accounting technique used to value inventory and determine the cost of goods sold by assuming a flow of costs.

FOB Shipping Point

A shipping term indicating that the buyer takes responsibility for goods and their transportation costs as soon as the goods leave the seller's premises.