Because of the potential for significant losses to sellers and buyers, under both of the federal securities acts liability is imposed on accountants for all acts of negligence, including "mere" negligence.

Question

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Under the Securities Act of 1933, accountants can be held liable for "mere" negligence, but under the Securities Exchange Act of 1934, the standard is higher, requiring scienter (a form of intent or knowledge of wrongdoing) for liability to be imposed.

Because of the Potential for Significant Losses to Sellers and Buyers