A plaintiff may elect to bring a lawsuit against auditors under applicable statutes-including the Securities Act of 1933 and the Securities Exchange Act of 1934-and under common law. For each circumstance, indicate the most likely source of CPA liability by placing the appropriate letter in the third column.

A. The Securities Act of 1933

B. The Securities Exchange Act of 1934

C. Common Law

Explain what the plaintiff has to prove to win and the defense the defendant (auditor) has to prove to avoid liability.

Circumstance:

1. A CPA's client is filing suit for negligence in performing an audit.
2. A stockholder of a publicly-held company who purchased the stock from another investor is filing suit for losses sustained on the stock.
3. A bank that lent money to a company is filing suit for misleading financial statements that were audited by the CPA.
4. An investor is filing suit for losses sustained in the purchase of publicly-traded bonds that were bought from the company upon initial registration.
5. A stockholder who purchased stock of a public company in an initial public offering is filing a suit for losses sustained in the purchase of the stock.
6. ACRA's client is filing suit for losses sustained for errors in a tax return prepared by the CPA.
7. A supplier who prepared credit to the CPA's publicly-held client is filing suit for losses sustained when the client could not pay the account.
8. An investor who purchased a corporate bond from another investor on the New York Stock Exchange is filing suit to recover losses.