The Private Securities Litigation Reform Act of 1995 applies the practice of ________ to auditor liability determinations.

Question

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The Private Securities Litigation Reform Act of 1995 applies proportionate liability to auditor liability determinations. This means that auditors are only responsible for losses that are directly attributed to their own negligence and not for the losses caused by other parties. This was introduced to reduce the exposure to auditors from large liability claims.

The Private Securities Litigation Reform Act of 1995 Applies the Practice