Problem

Under the liability provisions of section 11 of the Securities Act of 1933, auditors may b...

Under the liability provisions of section 11 of the Securities Act of 1933, auditors may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the registration statement. Under section 11, auditors usually are not liable to the purchaser

A. If they can show contributory negligence on the part of the purchaser.

B. If they can demonstrate due diligence.

C. Unless the purchaser can prove privity with the auditors.

D. Unless the purchaser can prove scienter on the part of the auditors.

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