Under the Liability Provisions of Section 11 of the Securities

question 23

Multiple Choice

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

• A)if there is contributory negligence on the part of the purchaser.
• B)if the CPA can prove due diligence.
• C)unless the purchaser can prove privity with the CPA.
• D)unless the purchaser can prove scienter on the part of the CPA.

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Definitions:

Tax Burden

The total amount of taxes paid by individuals or businesses, expressed as a percentage of income or revenue, indicating the financial impact of taxation.

Payroll Tax

Taxes imposed on employers and/or employees, typically based on the wages or salaries paid, to fund social security and healthcare programs.

Bear Burden

To carry or endure an obligation, duty, or hardship, especially in the context of paying taxes.

Labor Economists

Labor economists are experts who study the labor force, examining employment levels, wage dynamics, and the factors affecting labor market participation and efficiency.