Question

Under the Securities Act of 1933, if damages were incurred and there was a material misstatement or omission in the financial statements, the CPA will most likely lose the lawsuit unless:

Answer 1

Answer:

The CPA rebuts the allegations

Explanation:

The Securities Act of 1933 requires that investors receive financial and other significant information regarding any and all securities being sold publicly and prohibits deceit, misrepresentations, and other fraud in the sale of securities. Therefore, since there was material misstatement or omission in the financial statements, the only chance the CPA has is if they rebut the allegations. Meaning that they provide actual evidence, such as physical statements or witnesses that contradict or nullify the evidence that is being presented against them regarding the material misstatement or omission