Statutory Liability to Third Parties - Securities Act of 1933

Question 1

Under Section 11 In the Securities Act of 1933 requires the plaintiff only needs to prove that

Answer 1

There was material misstatements or omissions in the Financial Statements and Damages (prima facie case)

Question 2

When the CPA knows of the Third party

Answer 2

That third party has to show that the CPA was

1) Negligent
2) They relied on the Financial Statements

Question 3

What is a good defense for the CPA to Section 11 of the 1933 Act?

Answer 3

Followed GAAP and GAAS (due diligence)

Question 4

Under section 11 the plaintiff may

Answer 4

recover damages equal to the difference between amount paid and market value of the stock at the time of lawsuit.

Question 5

An accountant can be found neglegant for

Answer 5

A review and an Audit