The following pertains to auditor legal liability standards under the PSLRA:a. The Reform Act requires that, in any private securities fraud action in which the plaintiff is alleging a misleading statement or omission on the part of the defendant, “the complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.”90Do you believe this standard better protects auditors from legal liability than the standards which existed before the PSLRA? Explain.b. Do you believe the change in standards for auditors’ liability under the PSLRA from joint-and-several to proportional liability was a good thing? Explain.

Question

The following pertains to auditor legal liability standards under the PSLRA:
a. The Reform Act requires that, in any private securities fraud action in which the plaintiff is alleging a misleading statement or omission on the part of the defendant, “the complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.”90
Do you believe this standard better protects auditors from legal liability than the standards which existed before the PSLRA? Explain.

b. Do you believe the change in standards for auditors’ liability under the PSLRA from joint-and-several to proportional liability was a good thing? Explain.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Auditing

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Hepner Corporation has the following stockholders’ equity accounts:         Preferred stock (8%...

A: Goodwill: It is the intangible asset that adds value to the organisation fame.

Q: The following information shows Carperk Company’s individual investments in securities during its cu...

A: 1. Identify whether each investment a through e should be classified as a short-term or long-term in...

Q: record an adjusting entry (if necessary). Lonzo Co. receives $3,000 cash in advance for six months o...

A: Given information is: Lonzo Co. receives $3,000 cash in advance for six months of sustainable recycl...

Q: Assuming a current ratio of 1.00 and an acid-test ratio of 0.75, how will the purchase of inventory ...

A: Current ratio = Current Assets / Current Liabiliites Acid Test Ratio = Liquid Assets / Current Liabi...

Q: Define the term Retail Terminology.

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic transaction...

Q: Maines and Wahlen94 state in their research paper on the reliability of accounting information: “Acc...

A: Given: The reliability of the accounting information is explained in the research paper by Maine’s a...

Q: On January 1, NewTune Company exchanges 15,000 shares of its common stock for all of the outstanding...

A: The following computations are done to account for the consolidation of New Tune Co. and On-the Go I...

Q: Define Monetary/non-monetary method

A: Monetary and Non-Monetary Method Monetary Assets/Liabilities - Assets/Liabilities whose value remain...

Q: Read and T for True and F for False of the following phrases 1-standardization means eliminating all...

A: Standardization: Standardization can be defined as a process of setting up the most significant acco...