1. Suits are often brought against auditors that allege that the auditors did not detect some type of fraud or defalcation. List the and explain the six defenses that the auditors could mount against client negligence claims. (7 Points) 2. The most restrictive view under common law is that auditors have no liability to third parties who do not have a privity relationship with the auditor. Briefly define and explain the concept of privity and the effect it has on the auditor, client, investors, and creditors under common law. (7 Points) Idw. ( Points) 3. Section 11 under the Securities Act of 1933 treats claims against auditors more favorably than common law. Explain what two things does a plaintiff need to prove to have a case against the auditor of a company in which she purchased new investments? Explain what the auditor have to do to have the case dismissed? (8 Points) 4. One of the greatest sources of liability for auditors under the 1934 Act is Section 10(b) and the related Rule 10b-5, which states that it is unlawful for any person to defraud, make any untrue statement of a material fact, or engage in any act in connection with the purchase or sale of a security. Once a plaintiff has established that he or she can sue under Rule 10b-5, there are four elements that must be proven. Identify and explain the four elements. (8 Points) I (United States) O Focus MacBook Pro