Amanda Fessler
Auditing
Chapter 4
13. A
14. A
15. A
16. E
17. D
18. A
34.
A. Securities Act of 1933 – This requires companies to file registration statements with the SEC
before they may issue new securities to the public. The statement includes information about
the company, lists of its officers and major stockholders, and plans for using the proceeds from
the new securities issue. The liabilities section of the act imposes penalties for misstatements
contained in registration statements.
B. Securities Exchange Act of 1934 – This regulates the trading of securities after their initial
issuance. Regulated companies are required to file periodic reports with the SEC and
stockholders. Auditors are liable for negligence under the Securities Act of 1933 and possibly
under common law, depending on the precedent used by the court.
35. Third parties must prove the auditor’s guilt under common law and the Securities Act of 1934. Under
