D. (The Securities Act of 1933 regulates the initial offering of securities by a company)
Which of the following statements is true?
a. The Securities and Exchange Act of 1934 regulates intrastate stock offerings made by a company
b. The Securities Act of 1933 regulates the subsequent public trading of securities through brokers and markets
c.
B. (establishes required disclosure of nonfinancial information with the SEC)
What is the purpose of Regulation S-K?
a. Defines generally accepted accounting principles in the US
b. establishes required disclosure of nonfinancial information with the SEC
c. Establishes required financial disclosures with the SEC
d. indicates which
C. (Regulation S-K establishes regulations for nonfinancial information filed with the SEC whereas Regulation S-X prescribes the form and content of financial statements included in SEC filings)
What is the difference between Regulation S-K and Regulation S-X?
a. Regulation S-K establishes reporting requirements for companies in their initial issuance of securities whereas Regulation S-X is directed toward the subsequent issuance of securities
b.
A. (Regulates the public trading of previously issued securities through brokers and exchanges)
The Securities and Exchange Act of 1934
a. Regulates the public trading of previously issued securities through brokers and exchanges
b. Prohibits blue sky laws
c. regulates the initial offering of securities by a company
d. requires the registration of i
C. (a monetary fee assessed on organizations issuing securities)
Which of the following is a requirement of the Sarbanes-Oxley Act of 2002?
a. registration of all auditing firms with the PCAOB
b. annual inspection of all auditing firms registered with the PCAOB
c. a monetary fee assessed on organizations issuing securi
C. (the board members must be appointed by Congress)
Which of the following is not correct with regard to the PCAOB?
a. the board can expel a registered auditing firm without SEC approval
b. all registered auditing firms must be inspected at least every three years
c. the board members must be appointed by
B. (audit fees must be approved by the PCAOB)
which of the following is not a way by which the Sarbanes-Oxley Act attempts to ensure auditor independence from an audit client?
a. the auditing firm must be appointed by the client's audit committee
b. audit fees must be approved by the PCAOB
c. the aud
A. (a statement that must be filed with the SEC before a company can begin an initial offering of securities to the public)
What is a registration statement?
a. a statement that must be filed with the SEC before a company can begin an initial offering of securities to the public
b. a required filing with the SEC before a large amount of stock can be obtained by an inside party
D. (Form S-3)
Which of the following is a registration statement used by large companies that already have a significant following in the stock market?
a. Form 8-K
b. Form 10-K
c. Form S-1
d. Form S-3
D. (the SEC overruled the FASB on its handling of this matter)
What was the significance of the controversy in 1977 over the appropriate accounting principles to be used by oil- and gas-producing companies?
a. several major lawsuits resulted
b. companies refused to follow the SEC's dictates
c. Partners of a major acc
C. (a prospectus)
which of the following must be provided to every potential buyer of a new security?
a. a letter of comments
b. a deficiency letter
c. a prospectus
d. a form S-16
B. (filing information with the SEC by indicating that the information is already available in anther document)
What does the term incorporation by reference mean?
a. the legal incorporation of a company in more than one state
b. filing information with the SEC by indicating that the information is already available in anther document
c. a reference guide indicatin
A. (A letter the SEC sends to a company indicating needed changes or clarifications in a registration statement)
What is a letter of comments?
a. A letter the SEC sends to a company indicating needed changes or clarifications in a registration statement
b. A questionnaire supplied to the SEC by a company suggesting changes in Regulation S-X
c. A letter included in a
D. (the first part of a registration statement that a company must furnish to all potential buyers of a new security)
What is a prospectus?
a. a document attached to a Form 8-K
b. a potential stockholder as defined by Regulation S-K
c. a document a company files with the SEC prior to filing a registration statement
d. the first part of a registration statement that a com
C. (A public offering of no more than $5.9 million)
Which of the following is not exempt from registration with the SEC under the Securities Act of 1933?
a. Securities issued by a nonprofit religious organization
b. Securities issued by a government unit
c. A public offering of no more than $5.9 million
d.
B. (A prospectus)
Which of the following is usually not filed with the SEC on a regular periodic basis?
a. A Form 10-Q
b. A prospectus
c. A proxy statement
d. A Form 10-K
C. (A registration process for large companies that allows them to offer securities over a period of time without seeking additional approval by the SEC)
What is a shelf registration?
a. A registration statement that the SEC formally rejects
b. A registration statement that the SEC rejects due to the lapse of a specified period of time
c. A registration process for large companies that allows them to offer
C. (A system designed by the SEC to allow electronic filings)
What is EDGAR?
a. A system the SEC uses to reject registration statements that do not contain adequate information
b. The enforcement arm of the SEC
c. A system designed by the SEC to allow electronic filings
d. A branch of the government that oversees th
blue sky laws
Securities sold to the residents of the state in which the issuing company is chartered and principally doing business are exempted. However, these offerings may still be regulated by the securities laws of the individual states, these laws are commonly k
letter of comments
requests for clarifications, changes, or additional information (by the SEC)
S-8 Statement
Used as a registration statement for employee stock plans
Public Company Accounting Oversight Board
this group was created to oversee auditors of public companies; it effectively minimizes self-regulation in the accounting profession. The group
1. Has five members appointed by the SEC to staggered five-year terms
2. Allows only two members to be account
Prospectus
Part 1 of the registration statement referred to as what? it contains extensive information that includes these items:
1. financial statements for the issuing company audited by an independent CPA along with appropriate supplementary data
2. An explanatio
S-1 Statement
Used when no other form is prescribed. Usually used by new registrants or by companies that have been filing reports with the SEC for less than 36 months
S-3 Statement
Used by companies that are large and already have a significant following in the stock market (at least $75 million of the voting stock is held by nonaffiliates). Disclosure is reduced for these organizations because the public is assumed to already have
S-4 Statement
Used for securities issued in connection with business combination transactions
S-11 Statement
Used for the registration of securities by certain real estate companies
Securities Act of 1933
requires the registration of new securities offered for public sale so that potential investors can have adequate information. The act is also intended to prevent deceit and misrepresentation in connection with the sale of securities
Securities Exchange Act of 1934
Created the SEC and empowered it to require reporting by publicly owned companies and registration of securities, security exchanges, and certain brokers and dealers. This act prohibits fraudulent and unfair behavior such as sales practice abuses and insi
Foreign Corrupt Practices Act of 1977
Affects registration indirectly through amendment to the Securities Exchange Act of 1934. This act requires the maintenance of accounting records and adequate internal accounting controls.
Investment Company Act of 1940
Requires registration of investment companies, including mutual funds, that engage in investing and trading in securities. This act is designed in part to minimize conflicts of interest that arise with fund management.
Sarbanes-Oxley Act of 2002
this was designed as an answer to the numerous corporate accounting scandals that came to light in 2001 and 2002. This act mandated a number of reforms to bolster corporate responsibility, strengthen disclosure, and combat fraud. it also created the Publi
Proxy Statement
most of the significant actions undertaken by a company first must be approved at stockholder's meetings. Example: board of directors elections. Although such votes are essential to the operations of a business, few major companies could possibly assemble
Form 10-Q
contains condensed interim financial statements for the registrant and must be filed with the SEC shortly after the end of each quarter. Does not have to be audited by an independent CPA firm
Form 10-K
this is an annual report filed with the SEC to provide information and disclosures required by Regulation S-K and Regulation S-X; fortunately, because of the integrated disclosure system, the annual report distributed by companies to their stockholders no
Form 8-K
this is used to disclose a unique or significant happening; it is not filed at regular time intervals but within 15 calendar days of the event (or within 5 business days in certain specified instances)