Which of the following can an accountant use as a defense to liability under Section 11(a)of the Securities Act of 1933?
A)the nolo contendere rule
B)the due diligence defense
C)the Ultramares doctrine
D)the foreseeability standard

Question

Quizplus · Accepted Answer

The due diligence defense is a commonly used defense by accountants against Section 11(a) liability. It states that the accountant performed their duties with due care and diligence in preparing the relevant financial statements or information. The nolo contendere rule refers to a defendant's plea of no contest, which is not a relevant defense in this context. The Ultramares doctrine is a legal precedent that limits accountants' liability to third-party users of their audit reports only if they had privity, or a direct contractual relationship, with the accountant. The foreseeability standard relates to negligence claims and is not a defense against Section 11(a) liability.

Which of the Following Can an Accountant Use as a Defense