L22 Notes_Part_8 - 1. Background stock market crash privity...

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Statutory Liability The Securities Act of 1933 The Securities Exchange Act of 1934 Three major statutes that provide sources of liability for auditors: Sarbanes-Oxley Act of 2002
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Securities Act of 1933: Truth in Securities Act Generally regulates the disclosure of information in a registration statement for a new public offering of securities. Section 11 imposes a liability on issuers and others, including auditors, for losses suffered by 3 rd parties when false or misleading information is included in a registration statement.
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Securities Act of 1933 A. SEC Act of 1933 (Truth in Securities Act) RE: new issues
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Unformatted text preview: 1. Background stock market crash privity not required 2. Auditor's defenses a. immaterial b. loss was not due to error c. due diligence That's the bad news the good news is that there have been few cases 3. Cases a. Bar Chris Case a subsequent event was not thoroughly investigated; audit program was adequate but the senior accepted glib answers from the client. b. Result: i. SAS1 rulings on subsequent events ii. importance of understanding client's business and industry b. Yale Express Case - subsequent discovery of fact...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L22 Notes_Part_8 - 1. Background stock market crash privity...

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