What factors do the purchasers of securities under the Securities Act of 1933 need to prove...

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Accounting

What factors do the purchasers of securities under the SecuritiesAct of 1933 need to prove to recover losses from the CPA? Whatwould be a viable defense by the CPA?

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The security purchasers need only prove that 1 they sustained a loss and 2 the registration statements was misleading They need not prove that they relied upon the registration or that the auditors were negligent On the other hand if auditors are to avoid liability for the plaintiffs losses they generally must affirmatively prove that 1 they conducted the audit with due diligence 2 the plaintiffs losses were not caused y misstated financial statements 3 the plaintiffs knew of the financial statements misstatements when the securities were purchased or 4 the statute of limitation one year after the discovery of the misstatement but no more than three years after the security was first offered to the public had expired Auditors common law liability to clients and thirdparty beneficiaries states that clients can recover losses for damages caused by an improper audit through both breach of contract See Answer

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