Chapter 12
Select all that apply Which of the following is included in a prospectus?
Description of the business and properties owned by the issuer. Description of the risks associated with the securities. An explanation of the intended use of the proceeds to be generated by the sale of new securities.
Which of the following is the SEC's system for electronic submission and storage of data?
EDGAR
True or false: A registration statement must be filed with and made effective by the Public Company Accounting Oversight Board (PCAOB) before a company can offer a security publicly.
False
True or false: A registration statement must be filed with and made effective by the Public Company Accounting Oversight Board (PCAOB) before a company can offer a security publicly. True false question.
False
True or false: Effectiveness of a registration statement means that the SEC and the Division of Corporation Finance have inspected the securities and endorse their sale.
False
True or false: Foreign accounting firms are not required to register with the Public Company Accounting Oversight Board (PCAOB).
False
True or false: If company management is aware of something that could materially impact earnings in the future, but which has not yet impacted current earnings, they need not share that information with shareholders.
False
Which of the following forms is not filed at regular intervals?
Form 8-K
Which of the following is used to disclose significant events?
Form 8-K
Select all that apply Which of the following is included in a proxy statement?
List of company directors and executive officers. Three-year summary of industry segments and foreign and domestic operations.
The company's past, present, and future are described by management in the
MD&A section.
Which part of the registration statement discloses information about the expenses of issuance and sales to special parties?
Part II
Which part of the registration statement need not be provided to prospective buyers of a company's securities?
Part II
Which of the following is issued by management or other interested parties in hopes of securing voting rights to use at stockholders' meetings?
Proxy statement
Firms that prepare, issue, or participate in preparing an audit report for an issuer must register with the
Public Company Accounting Oversight Board (PCAOB)
Which of the following gives the SEC the ultimate legal authority for establishing accounting principles for most publicly held companies in the U.S.?
Regulation S-X
Which of the following parties ensures that financial information in a registration statement meets the standards of Regulation S-X?
SEC accountant
How are investors notified of management's priorities, accomplishments, and concerns?
The MD&A section of a registrant's filing.
Select all that apply Which of the following is correct regarding proxy statements?
The company must disclose any restrictions on its ability to continue paying dividends. The market price of the company's stock for each quarterly period within the two most recent fiscal periods is disclosed.
Which of the following statements is correct regarding the commissioners of the SEC?
They serve five-year staggered terms.
Match the description of an accounting scandal that occurred in the early 2000s with the individual behind the fraud.
WorldCom CEO Bernard Ebbers: Borrowed $408 million from the company that had improperly accounted for $9 billion. Enron's CEO Kenneth Lay: Received $152.7 million in payments and stock leading up to the company's collapse amid revelations the company hid debt and inflated profit for years. Aldephia Communications founder and CEO: Conspired with four other executives to loot the company.
Financial reporting standards for most publicly held companies can be changed by
amending Regulation S-X.
The Securities Exchange commission is
an independent agency of the federal government.
The SEC has the responsibility for ensuring that
complete and reliable information is available to investors.
Select all that apply The Securities Exchange Act of 1934
created the Securities Exchange Commission (SEC). regulates trading of securities through brokers and exchanges.
Select all that apply Regulation S-K established requirements for disclosure of
descriptions of legal proceedings. management's discussion and analysis of the current financial condition and results of operations.
A Form 8-K is
filed within 15 calendar days of the event.
A Form 8-K is Multiple choice question.
filed within 15 calendar days of the event.
Select all that apply The Securities Act of 1933
is often called the "truth in securities law". regulates the initial offering of securities.
Select all that apply When a registration statement is filed, the SEC
is responsible for making sure the information complies with all applicable regulations. ensures full and fair disclosure of relevant financial information.
Select all that apply Regulation S-X established requirements for disclosure of
notes to financial statements and related schedules. the form and content of the financial statements.
Part I of a registration statement is referred to as a(n)
prospectus.
Effectiveness of a registration statement means
securities can be sold to the public.
When a registration statement is filed, corporate officials
take responsibility for the information contained in the registration statement.
The public accounting profession's self-regulation was difficult to maintain due to
the size of many of the international audit firms it sought to control.
Select all that apply Which of the following are considered securities?
treasury stock debenture note
Select all that apply A deficiency letter is issued to request
Clarifications Changes Additional information
Select all that apply Which of the following is correct regarding the composition of the SEC?
Commissioners serve five-year terms. The chairman is from the same political party as the president.
Which of the following is issued to a company to request clarifications, changes, or additional information especially for filings involving an initial registration?
Deficiency letter
A Form (1)-(2) is used to disclose a unique or significant happening.
1. 8 2. K
The public accounting profession's self-regulation was difficult to maintain because the (1), the major professional body, was considerably smaller than many of the international audit firms it sought to control.
1. AICPA
The acronym for the SEC's system for electronic submission and storage of data is known as (1).
1. EDGAR
Regulation S-(1) requires descriptions of the registrant's business and its securities.
1. K
A (1) (2) is issued to a company to request clarifications, changes, or additional information especially for filings involving an initial registration.
1. deficiency 2. letter
When a company has fulfilled all SEC requirements, a registration statement is made (1) which means securities can be sold to the public.
1. effective
The securities law often referred to as the "truth in securities law" regulates the (1) (2) of securities.
1. initial 2. offering
The 1933 and 1934 Acts put an end to stock price (1) and (2) of corporate information - practices that were common before the Great Crash of 1929.
1. manipulation 2. misuse
A(n) (1) includes financial statements for the issuing company audited by an independent CPA and a description of the risks associated with the securities.
1. prospectus
The SEC's authority applies mainly to (1) (2) companies.
1. publicly 2. held
A (1) (2) must be filed with and made effective by the SEC before a company can offer a security publicly.
1. registration 2. statement
Select all that apply Which of the following were part of the accounting profession's self-regulation system?
AICPA ASB
Select all that apply Which of the following were involved in a significant financial scandal in the early 2000s?
Adelphia Enron WorldCom
Which of the following parties ensures that nonfinancial information in a registration statement complies with Regulation S-K?
Analyst
Match the role with the appropriate responsibility that individual takes for a registration statement.
Analyst: Determines all nonfinancial information complies with Regulation S-K. Accountant: Verifies data included in the filing meet Regulation S-X. SEC lawyer: Verifies legal aspects of the registration statement. Company's independent CPA: Conducts a formal audit.
