Under Section 11 of the Securities Act of 1933 and Section 10(b), Rule 10b-5, of the Securities Exchange Act of 1934, a CPA may be sued by a purchaser of registered securities. The following items relate to what a plaintiff who purchased securities must prove in a civil liability suit against a CPA.

The plaintiff security purchaser must allege or prove:

1. Material misstatements were included in a filed document.

2. A monetary loss occurred.

3. Lack of due diligence by the CPA.

4. Privity with the CPA.

5. Reliance on the financial statements.

6. The CPA had scienter (knowledge and intent to deceive).

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