The same three defenses available to auditors in common lawsuits by third parties-nonnegligent performance, lack of duty, and absence of causal connection-are also available for suits under the Securities Exchange Act of 1934.

Question

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Auditors can use these defenses in lawsuits under the Securities Exchange Act of 1934, as they address the auditor's performance, duty, and the causal link between their actions and the plaintiff's loss.

The Same Three Defenses Available to Auditors in Common Lawsuits