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Pursuant to a public offering, a CPA firm audited the financial statements. After the offering,...

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Accounting

Pursuant to a public offering, a CPA firm audited the financial statements. After the offering, omissions and misstatements were found. The CPA firm is now being sued by the purchasers of the stock. The purchasers are alleging that the erroneous financial statements in the registration statement caused them to suffer a monetary loss. The CPA firm can avoid liability if it can prove
a) that it used due diligence in auditing the financial statements.
b) the corporation was the party who made misstatements and omissions.
C) the firm believed that the statements were accurate.
d) None of these will avoid liability.
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