Author Question: Fast Auditors prepared audited financial statements for Mega Company's registration statement in ... (Read 113 times)

rosent76 · **on:** Jun 24, 2018

Fast Auditors prepared audited financial statements for Mega Company's registration statement in compliance with the 1933 Securities Act. John bought stock in Mega Company. It was discovered that the financial statements prepared for the registration statement contained some important omissions. John sued Fast Auditors to recover his investment when Mega Company turned out to be a bad investment. What must John prove to recover from Fast Auditors?

Question 2

Discuss the advantages and disadvantages of using IFRS.

momolu · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

To prevail under the Securities Act of 1933, John must prove only that the registration statement contained a material misstatement or omission, and he lost money.

Answer to Question 2

As businesses become more international, using IFRS, or international financial reporting standards, would make cross-country comparisons easier. Worldwide consistency would be possible. Foreign companies might be more willing to invest in the United States if they could use international accounting rules. A disadvantage is that some IFRS standards are weaker than the GAAP standards. Also, some experts fear allowing use of IFRS would amount to outsourcing financial safety standards.