Under the liability provisions of Section 11 of the Securities Act of 1933, a CPA may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the security's registration statement. Under Section 11, a CPA usually will not be liable to the purchaser:

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Under Section 11, a CPA may still be liable for materially misstated financial statements included in a security's registration statement. However, if the CPA can prove they conducted due diligence in their examination of the financial statements, they may not be held liable. Contributory negligence (choice A) on the part of the purchaser and privity (choice C) are not relevant under Section 11. Scienter (choice D), which refers to intent or knowledge of wrongdoing, is not required to hold a CPA liable under Section 11.

Under the Liability Provisions of Section 11 of the Securities