The Securities and Exchange Commission Has Authority To

The Securities and Exchange Commission has authority to:

A) prescribe specific auditing procedures to detect fraud concerning inventories and accounts receivable of companies engaged in interstate commerce.
B) deny lack of privity as a defense in third-party actions for gross negligence against the auditors of public companies.
C) determine accounting principles for the purpose of financial reporting by companies offering securities to the public.
D) require a change of auditors of governmental entities after a given period of years as a means of ensuring auditor independence.

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