Which of the following can be used by an accountant to counter liability imposed 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 can be used by an accountant to counter liability imposed under Section 11(a) of the Securities Act of 1933. This defense requires the accountant to prove that they made a reasonable effort to verify the accuracy of the financial statements and that any errors or omissions were not due to a lack of due diligence on their part. The nolo contendere rule is a criminal law concept that is not applicable in civil liability cases. The Ultramares doctrine limits the liability of an accountant to only those parties with whom they have a privity of contract, which may not be applicable in all cases. The foreseeability standard is not a defense against liability under Section 11(a) of the Securities Act.

Which of the Following Can Be Used by an Accountant