The Securities Act of 1933 Significantly Differs from Other Statutes

question 66

Multiple Choice

The Securities Act of 1933 significantly differs from other statutes concerning auditor liability in that:

• A) The plaintiff does not need to show negligence.
• B) The plaintiff does not need to show (s)he relied on the financial statements.
• C) Any third party that purchased securities described in the registration statement may sue the auditor for any material misrepresentation.
• D) All of the above.

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Definitions:

Plaintiff's Negligence

A legal concept in personal injury cases where the plaintiff's own negligent actions contributed to their harm or loss.

Product Misuse

A defense against product liability that may be raised when the plaintiff used a product in a manner not intended by the manufacturer. If the misuse is reasonably foreseeable, the seller will not escape liability unless measures were taken to guard against the harm that could result from the misuse.

Defense

Legal strategies and arguments used by a defendant in litigation to counteract the claims made by the plaintiff.

Product Liability

Refers to the legal responsibility of manufacturers and sellers to compensate for harm caused by defective products they market.