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Which of the following is true regarding the 1995 federal legislation that restored power to the Securities and Exchange Commission (SEC) and federal prosecutors to

Which of the following is true regarding the 1995 federal legislation that restored power to the Securities and Exchange Commission (SEC) and federal prosecutors to pursue accountants who aid or abet corporate fraud?

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  • It imposes liability on an accounting firm for the full amount of a judgment if the defendant corporation is insolvent.

  • It limits the firms liability to the proportion of the fraud for which the accountants were responsible, plus a ten (10) percent premium when the main defendant is insolvent.

  • It shields accountants from joint-and-several liability.

  • It limits the firms liability to the proportion of the fraud for which the accountants were responsible, plus a twenty-five (25) percent premium when the main defendant is insolvent.

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