Under the Liability Provisions of Section 11 of the Securities

question 12

Multiple Choice

Under the liability provisions of section 11 of the Securities Act of 1933,auditors may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the registration statement.Under section 11,auditors usually will not be liable to the purchaser

• A)If auditors can show contributory negligence on the part of the purchaser.
• B)If auditors can demonstrate due diligence.
• C)Unless the purchaser can prove privity with auditors.
• D)Unless the purchaser can prove scienter on the part of auditors.

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Definitions:

Cause and Effect

A relationship in which one event (the cause) makes another event happen (the effect).

Confrontation

A communication strategy involving directly addressing an issue, behavior, or problem with someone in a straightforward manner.

Substance Abuse Disorders

A category of mental health disorders characterized by the excessive and harmful use of substances, including drugs and alcohol, leading to significant impairment or distress.

Counseling Technique

Various methods and approaches used by therapists and counselors to help individuals overcome personal, social, or psychological problems and difficulties.