What Is a Due Diligence Defense

What is a due diligence defense?

A) An audit firm must show that it made a reasonable investigation, that the firm followed auditing standards, and accordingly had reasonable grounds to believe, and did believe, that the statements certified were true at the date of the statements and as of the time the registration statement became effective.
B) Not having to prove reliance on the false or misleading statement or that the loss suffered was the proximate result of the statement if purchase was made before the issuance of an income statement covering a period of at least 12 months following the effective date of the registration statement.
C) Basing a claim on an alleged materially false or misleading financial statement contained in the registration statement.
D) Concluding that subsequent events review was in conformity with generally accepted auditing standards.