Mason and Madison, CPAs, audited the financial statements of Jefferson Company

that were included in Jefferson$$s annual report. Subsequently, Jefferson went

bankrupt and the creditors of the company brought a lawsuit against Jefferson$$s

management, board of directors, auditors $(=$Mason and Madison$),$ and attorneys

for the misstatements of the financial statements.

Assume that the jury in the case decides that responsibilities for the $$1$ million in

losses should be allocated as follows:

Management: $70\%$; Board of Directors: $20\%$; Mason and Madison $5\%$; Attorneys $5\%$

Questions:

a$.$ Under what laws would the creditors initiate this lawsuit?

b$.$ Assuming that management had no financial resources, describe how Mason

and Madison$$s share of the losses change under Joint and Several Liability rule

$($You don$$t need to calculate the exact amount$).$