When financial statements are determined to be false or misleading, the auditor's best defense against a plaintiff bringing suit under the 1933 Securities Act would be:

Question

Quizplus · Accepted Answer

The auditor's best defense against a lawsuit under the 1933 Securities Act for false or misleading financial statements is due diligence. This means the auditor can show that they performed their audit with the appropriate level of care and thoroughness, following the standards of the profession.

When Financial Statements Are Determined to Be False or Misleading