Under the Securities Act of 1933, if damages were incurred and there was a material misstatement or omission in the financial statements, the CPA automatically loses unless
A)The management intentionally deceived the auditors
B)The damages were incurred to a third party that was not a signatory to the contract
C)The CPA can shift the burden of proof to the investors
D)The CPA rebuts the allegations

Question

Quizplus · Accepted Answer

The CPA can defend themselves by proving they conducted a reasonable investigation and had reasonable grounds to believe the financial statements were accurate, thus rebutting the allegations.

Under the Securities Act of 1933, If Damages Were Incurred