Question 7 5 pts X & Y, CPAs, audited the financial statements of Joseph Co. included in the filing submitted to the SEC. The financial statements included material misstatements. Several stockholders are now suing X & Y under the 1934 Securities Exchange Act. What is X & Y's best defense? 1. The 1934 Act does not apply to them. 2. They were not in privity of contract with the stockholders. 3. They were not aware of the material misstatements. 4. Their engagement letter specifically disclaimed responsibility for material misstatements. O 1. O2 O 3 04 Question 8 5 pts Which of the following services is appropriate for an auditor to perform in addition to performing a financial statement audit under PCAOB standards? 1. Actuarial services. 2. An audit of internal control. 3. Bookkeeping services. 4. Appraisal and valuation services. 0 1 O2 O 3 04