Under the liability provisions of section 11 of the Securities Act of 1933,auditors may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the registration statement.Under section 11,auditors usually will not be liable to the purchaser
A) if auditors can show contributory negligence on the part of the purchaser.
B) if auditors can demonstrate due diligence.
C) unless the purchaser can prove privity with auditors.
D) unless the purchaser can prove scienter on the part of auditors.

Question

Quizplus · Accepted Answer

Under section 11, auditors may avoid liability if they can demonstrate due diligence in their work, meaning they carried out their work with a reasonable degree of care and skill. The other options may also limit or prevent liability to some extent, but demonstrating due diligence is typically the most effective way for auditors to avoid liability under section 11.

Under the Liability Provisions of Section 11 of the Securities