Question

Which defense must an accountant establish to be absolved from civil liability under Section 18 of the Securities Exchange Act of 1934 for false or misleading statements made in reports or documents filed under the Act?

A) Willful intent to deceive
B) Ignorance of accounting principles
C) Negligence in preparing financial statements
D) Good faith and lack of knowledge of the statement's falsity

Answer 1

The defense that an accountant must establish to be absolved from civil liability under Section 18 of the Securities Exchange Act of 1934 for false or misleading statements made in reports or documents filed under the Act is Good faith and lack of knowledge of the statement's falsity.

Step-by-step explanation:

The defense that an accountant must establish to be absolved from civil liability under Section 18 of the Securities Exchange Act of 1934 for false or misleading statements made in reports or documents filed under the Act is Good faith and lack of knowledge of the statement's falsity.

This defense means that the accountant must show that they acted in good faith, meaning they honestly believed the statements were true, and they did not have knowledge that the statements were false.