Select the necessary words from the list of possibilities to complete the following statements. 1.StatementsThecase, a landmark case of liability under the Securities Act of 1933, involved criticism of theauditors' review for subsequent events.Under the Securities Act of 1933, initial purchasers of securities may sue the auditors for misleading audited2. financial statements and need not prove that they relied on the financial statements. The burden of proof is onthe auditors to prove that they werein the performance of their work.4.Aof financial statements involves the performance of limited investigative procedures that provide3.a basis for the expression of limited assurance that there are no material departures from generally acceptedaccounting principles.When damage to another is directly attributable to a wrongdoer's act,is said to exist.5.A document including audited financial statements that must be filed with the SEC by any company intending tosell its securities to the public through the mails or interstate commerce is called aAnswer

Introduction; Securities act of 1933: (1933) required that a corporation issuing securities file…

1. 2. Statements 4. The case, a landmark case of liability under the Securities Act of 1933, involved criticism of the auditors' review for subsequent events. Under the Securities Act of 1933, initial purchasers of securities may sue the auditors for misleading audited financial statements and need not prove that they relied on the financial statements. The burden of proof is on the auditors to prove that they were in the performance of their work. А. of financial statements involves the performance of limited investigative procedures that provide 3. a basis for the expression of limited assurance that there are no material departures from generally accepted accounting principles. When damage to another is directly attributable to a wrongdoer's act, is said to exist. 5. A document including audited financial statements that must be filed with the SEC by any company intending to sell its securities to the public through the mails or interstate commerce is called a Answer

1. 2. Statements 4. The case, a landmark case of liability under the Securities Act of 1933, involved criticism of the auditors' review for subsequent events. Under the Securities Act of 1933, initial purchasers of securities may sue the auditors for misleading audited financial statements and need not prove that they relied on the financial statements. The burden of proof is on the auditors to prove that they were in the performance of their work. А. of financial statements involves the performance of limited investigative procedures that provide 3. a basis for the expression of limited assurance that there are no material departures from generally accepted accounting principles. When damage to another is directly attributable to a wrongdoer's act, is said to exist. 5. A document including audited financial statements that must be filed with the SEC by any company intending to sell its securities to the public through the mails or interstate commerce is called a Answer

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter13: Auditing Debt, Equity, And Long-term Liabilities Requiring Management Estimates

Section: Chapter Questions

Problem 27CYBK

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Select the necessary words from the list of possibilities to complete the following statements. 1. Statements The case, a landmark case of liability under the Securities Act of 1933, involved criticism of the auditors' review for subsequent events. Under the Securities Act of 1933, initial purchasers of securities may sue the auditors for misleading audited 2. financial statements and need not prove that they relied on the financial statements. The burden of proof is on the auditors to prove that they were in the performance of their work. A of financial statements involves the performance of limited investigative procedures that provide 3. a basis for the expression of limited assurance that there are no material departures from generally accepted accounting principles. 4. When damage to another is directly attributable to a wrongdoer's act, is said to exist. 5. A document including audited financial statements that must be filed with the SEC by any company intending to sell its…
When investors sue auditors for damages under section 11 of the Securities Act of 1933,they must allege and provea. Scienter on the part of auditors.b. The audited financial statements contained a material misstatement.c. They relied on the materially misstated financial statements.d. Their reliance on the materially misstated financial statements was the direct cause oftheir loss.
Select the necessary words from the list of possibilities to complete the following statements. 1 Statements Answer When CPAS are associated with 1. the CPAS' services and believe that the accountants are acting as auditors. a possibility exists that the client may misinterpret the extent of Under the Securities Act of 1933, initial purchasers of securities may sue the auditors for misleading audited 2. financial statements and need not prove that they relied on the financial statements. The burden of proof is on the auditors to prove that they were in the performance of their work. 3. Unwritten law that has developed through court decisions is referred to as 4. When damage to another is directly attributable to a wrongdoer's act, is said to exist. of financial statements involves the performance of limited investigative procedures that provide a basis for the expression of limited assurance that there are no material departures from generally accepted accounting principles. 5.
In comparison to the burden of proof required of plaintiffs in civil lawsuits against independent auditors under common law, section 10(b) of the Securities Exchange Act of 1934a. Is the same regarding plaintiffs’ need to prove damages or losses.b. Is the same regarding plaintiffs’ need to establish privity or a beneficiary relationshipwith auditors.c. Does not require that plaintiffs prove their reliance on materially misstated financialstatements.d. Does not require that plaintiffs prove that relying on the materially misstated financialstatements caused their losses.
Under the Private Securities Litigation Reform Act (the Act), independent auditors are required to firsta. Report in writing all instances of noncompliance with the Act to the client’s board of directors.b. Report to the SEC all instances of noncompliance with the Act they believe have a material effect on financial statements if the board of directors does not first report to the SEC.c. Report clearly inconsequential noncompliance with the Act to the audit committee of the client’s board of directors.d. Resign from the audit engagement and report the instances of noncompliance with the Act to the SEC.
The following pertains to auditor legal liability standards under the PSLRA:a. The Reform Act requires that, in any private securities fraud action in which the plaintiff is alleging a misleading statement or omission on the part of the defendant, “the complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.”90Do you believe this standard better protects auditors from legal liability than the standards which existed before the PSLRA? Explain.b. Do you believe the change in standards for auditors’ liability under the PSLRA from joint-and-several to proportional liability was a good thing? Explain.
The burden of proof that must be proven to recover losses from the auditors under the Securities Exchange Act of 1934 is generally considered to be: :
Please answer with reason for all why the option is correct and why the other options are incorrectPlease answer correct otherwise skip it Which of the following statements about the Securities Act of 1933 is not true? A. The auditor will not be liable if he or she can demonstrate due diligence in performing the audit. B. The third-party user does not have the burden of proof that he or she relied on the financial statements. C. The third-party user does not have the burden of proof that the loss was caused by the misleading financial statements. D. The third party has the burden of proof that the auditor was either negligent or fraudulent in doing the audit.
C. Give an example and explain securities fraud in violation of the Securities Act of ‘33. D. Explain how Enron “cooked the books” with two of its accounting practices
An investor seeking to recover stock market losses from a CPA firm associated with aninitial offering of securities based on an unmodified opinion on financial statements thataccompanied a registration statement must establish thata. The audited financial statements contain a false statement or omission of material fact.b. The investor relied on the financial statements.c. The CPA firm did not act in good faith.d. The CPA firm would have discovered the false statement or omission if it had exerciseddue care in its examination.
The Securities Act of 1933 and Securities Exchange Act of 1934 containa. Civil liability provisions applicable to auditors. b. Criminal liability provisions applicable to auditors. c. Neither a nor b. d. Both a and b.