Assigment V 1. Match the term with its correct definition. (10 points) Near Privity Negligence Privity Standing Constructive fraud Fraud Fraud on the markets Gross negligence (a) A relationship between two parties sharing a common interest (b) The right to bring a legal action against a defendant in court (c) Three-part standard: 1). The auditor understood that the financial statements were going to be used for a specific purpose (e.g, credit granting decisions). 2).The auditor knew the plaintiff and knew the client relied on the work of the auditor. 3). Action on the part of the auditor indicating that (s)he understood the third party was going to rely on the auditor's opinion. (d) Absence of due professional care in the execution of an audit. (e) Complete disregard for negative results of one's actions ( The same as gross negligence in some states. () Knowingly or intentionally engaging in a material misstatement (h) Plaintiff need not show reliance on financial statements per se, but merely that the information contained in the misstated financial statements affected the securities markets