When investors sue auditors for damages under section 11 of
When investors sue auditors for damages under section 11 of the Securities Act of 1933, they must allege and prove
a. Scienter on the part of auditors.
b. The audited financial statements contained a material misstatement.
c. They relied on the materially misstated financial statements.
d. Their reliance on the materially misstated financial statements was the direct cause of their loss.

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