Legal Liability for Auditors Under the Securities Act of 1934

Legal liability for auditors under the Securities Act of 1934 comes from the requirement that prohibits any fraudulent activities involving the sale or purchase of a security.This requirement has been interpreted to apply to auditors if

A) they were negligent in performing the audit
B) the audited financial statements contained a material misrepresentation or omission
C) they were diligent in performing the audit
D) they intentionally or recklessly misrepresent information given to third parties