Chapter 10: Reporting Requirements under the 1934 Securities Exchange Act - Multiple Choice

An institution owns 8% of the voting common equity of ABC Corporation. It filed its last 13D beneficial ownership statement on June 1. If the institution buys 5,000 more shares of ABC in the open market on August 25, representing an increase in ownership of 1.1%, must it disclose this increase in ownership? A) No B) Yes, within 10 days of August 25 C) Yes, within 30 days of August 25 D) Yes, within 60 days of August 25

B) Yes, within 10 days of August 25

To qualify as a "smaller reporting company," a company must have a common equity public float of A) less than $50 million B) less than $75 million C) less than $100 million D) less than $700 million

B) less than $75 million

For reporting purposes, the SEC defines "insiders" as officers, directors and A) The top four executives by compensation B) persons owning at least 10% of the company's voting shares. C) Anyone who provides advice to the board for a fee D) Employees who earn above a threshold amount

B) persons owning at least 10% of the company's voting shares.

To meet ongoing reporting requirements of the Securities Exchange Act of 1934, a company files an application to list its securities on a national securities exchange. Once the exchange has approved the company's listing A) securities must be separately registered with the SEC under a 10-K filing B) securities are considered to be registered with the SEC C) securities may begin trading after a 90-day waiting period D) at least one quarterly report must be filed before securities can begin trading

B) securities are considered to be registered with the SEC

The Securities Exchange Act of 1934 requires an issuer to register with a national securities exchange once it has reach which TWO of the following thresholds? I. At least 100 shareholders II. At least 2,000 shareholders III. At least $10 million in assets IV. At least $50 million in assets A) I & III B) I & IV C) II & III D) II & IV

C) II & III

The primary purpose of Regulation FD is to A) ensure more timely filing of annual and quarterly reports B) prevent insider trading C) prevent selective disclosure of material information to outsiders D) provide more transparency for the SEC in between quarterly reports

C) prevent selective disclosure of material information to outsiders

When a person acquires beneficial ownership of greater than 5% of a registrant's equity securities, they are required to file a(n) A) Exchange Offer B) Form 8-K C) Form 14A D) Schedule 13D

D) Schedule 13D

The Sarbanes-Oxley Act requires public accounting firms to describe the scope of their testing of companies' internal controls and procedures. This description and findings from testing must be included in A) The company's annual report B) An 8-K filing, when warranted C) A letter to the Board of Directors D) The audit report

D) The audit report

The purpose of the Selected Financial Data section in a registrant's periodic filings is to A) provide a basis for determining comparable companies B) supply five years of projected financial data so that investors can make an informed view of the company's future free cash flow C) provide an overview of adjusted financial data, including EBITDA and EBIT D) supply in a convenient and readable format, an overview of the registrant's financial condition and results of operations

D) supply in a convenient and readable format, an overview of the registrant's financial condition and results of operations

Detailed information regarding a company's business, segments, competition, and customers is typically found in its A) 10-K B) 10-Q C) 13D D) 8-K

A) 10-K

Which one of the following could be a "smaller reporting company?" A) A Foreign issuer B) An Investment company C) A Business development company D) An Asset-backed issuer

A) A Foreign issuer

The SEC finds that a company made an intentional selective disclosure of material information during a "confidential meeting" with a few analysts. In this case, the company is required by Regulation FD to publicly disclose the same information A) Simultaneously B) Promptly C) Within 48 hours D) Within three business days

A) Simultaneously

A registrant's description of its business in its 10-K must A) describe the primary products and services rendered by the registrant B) describe the exact process by which it produces its products or provides its services C) disclose all internal projects in the pipeline D) provide a general consensus regarding employee morale

A) describe the primary products and services rendered by the registrant

The timing of required public disclosure under Regulation FD is I. Simultaneous if the selective disclosure was intentional II. Promptly if the selective disclosure was intentional III. Simultaneous if the selective disclosure was non-intentional IV. Promptly if the selective disclosure was non-intentional A) I and II B) I and IV C) II and III D) II and IV

B) I and IV

Annual reports must be filed on Form A) 8-K B) 10-Q C) 10-K D) N-Q

C) 10-K

Which of the following must be included in the Selected Financial Data section of a registrant's 10-K? I. Five years of adjusted EBITDA II. Financial data for any additional fiscal years necessary to keep the information from being misleading. III. Financial data for each of the last five fiscal years of the registrant. IV. An overview of each financing transaction entered into by the registrant for each fiscal year. A) I and III B) I and IV C) II and III D) II and IV

C) II and III

The annual statement of beneficial ownership for directors, officers, or owners of more than 10% of the registrant's equity securities are filed on A) Form 1-N B) Form 3 C) Form 4 D) Form 5

D) Form 5

Which of the following categories of filers must file their form 10-Q within 40 calendar days? I. Large accelerated filer II. Accelerated filer III. Non-accelerated filer IV. Small accelerated filer A) I & II B) I & III C) II & III D) I, II, III, & IV

A) I & II

Under what circumstances can companies meet Regulation FD requirements for public disclosure of material information through a conference phone call? I. The call must be announced ahead of time II. The call must be broadly available to the public, live or through transcripts or replays III. The call must exclude professional analysts and members of the media A) I and II only B) I and III only C) II and III only D) I, II and III

A) I and II only

Which of the following financial information items must be included in a Form 10-Q by a registrant? I. Financial statements II. List of officers, directors and 5% shareholders. III. Quantitative and qualitative disclosures about market risk IV. Audited financial statements A) I and III B) I and IV C) II and III D) II and IV

A) I and III

Which of the following parties are classified as insiders under the Securities Exchange Act of 1934? I. A shareholder who owns 7 percent of outstanding stock of a corporation and his spouse who owns 4 percent II. The vice president of a firm III. A firm's director of technology A) I only B) I and II only C) III only D) I, II, and III

A) I only

SEC Form 3 refers to which of the following? A) Initial Statement of Beneficial Ownership of Securities B) Notice of Exempt Offering of Securities C) Registration Statement for Private Issuers D) Registration Statement for Real Estate Companies

A) Initial Statement of Beneficial Ownership of Securities

What does MD&A refer to? A) Management's Discussion & Analysis B) Managerial Depreciation & Amortization method C) Master Documentation & Analysis D) Industry-specific type of research and development project

A) Management's Discussion & Analysis

A company is selling a additional issue of common stock. In this situation, all of the following persons are insiders EXCEPT A) The lead underwriter B) A shareholder who currently owns 13% of the outstanding common stock of the company. C) The chief financial officer of the company D) The Chief Marketing Officer of the company

A) The lead underwriter

Which of the following is TRUE regarding a registrant's financial information disclosures in its 10-K? A) The registrant must disclose all foreign countries, in total, from which it derives revenues for the last three fiscal years. B) The registrant must disclose all compensation paid to foreign dignitaries for the last three fiscal years. C) The registrant must disclose amounts paid for executive travel for the last five fiscal years. D) The registrant must disclose the top 50 list of customers by revenues for the last three fiscal years.

A) The registrant must disclose all foreign countries, in total, from which it derives revenues for the last three fiscal years.

Which TWO of the following are TRUE of the timing of required public disclosure under regulation FD? I. It must be simultaneous if the selective disclosure was intentional II. It must be made promptly if the selective disclosure was intentional III. It must be simultaneous if the selective disclosure was unintentional IV. It must be made promptly if the selective disclosure was unintentional A) I & III B) I & IV C) II & III D) II & IV

B) I & IV

The Sarbanes-Oxley Act includes a requirement that public companies must establish and maintain adequate internal controls and procedures for financial reporting. The assessment of effectiveness of internal controls is made in A) Each quarterly filing B) The company's annual report C) A special non-public report to the SEC D) A Letter of Evaluation sent to the company's attest auditor

B) The company's annual report

The annual report that companies must file to meet the ongoing reporting requirements of the '34 Act is the A) 8-K B) 8-Q C) 10-K D) 10-Q

C) 10-K

The annual report that public companies must file to meet the ongoing reporting requirements of the Securities Exchange Act of 1934 is a(n) A) 8-K B) 8-Q C) 10-K D) 10-Q

C) 10-K

For purposes of determining whether it is a large accelerated filer or an accelerated filer, when does a company calculate its worldwide market cap? A) At the end of the fiscal year B) At the end of each quarter C) At the end of the second quarter of the fiscal year D) On the date of the highest market cap attained during a given fiscal year

C) At the end of the second quarter of the fiscal year

What does Fair Disclosure refer to? A) Disclosure that an announced acquisition is fair from a financial point of view B) Disclosure that a company is in compliance with Fair Trade rules C) Disclosure of material nonpublic information to the entire public in the event it is shared with securities market professionals D) Fairness to investors of disclosing EBITDA in SEC filings

C) Disclosure of material nonpublic information to the entire public in the event it is shared with securities market professionals

For a 5% or greater owner of voting equity securities in a public company, the beneficial ownership report requires disclosure of whether the holder has been convicted of a crime over what period? A) The last year B) The last three years C) The last five years D) At any time in his/her lifetime

C) The last five years

An executive officer of a public company engages in a swap agreement that results in a change of beneficial ownership of the company's equity shares. Must this be reported under the Sarbanes-Oxley Act, and if so, how soon? A) No, it need not be reported B) Yes, it must be reported prior to executing the swap C) Yes, it must be reported before the end of the second business day after the swap D) Yes, it must be reported before or at the time of the company's next quarterly or annual report under the '34 Act

C) Yes, it must be reported before the end of the second business day after the swap

The first step required under the Securities Exchange Act of 1934 for meeting continuous reporting requirements is to A) file for a state operating license B) file articles of incorporation C) file an application with a national securities exchange D) pass a board resolution

C) file an application with a national securities exchange

Which of the following best describes the difference between a Schedule 13D and a Schedule 13G? A) A schedule 13D is for 5% shareholders whereas a schedule 13G is for 10% shareholders B) A schedule 13D is for affiliates whereas a schedule 13G is for non-affiliates C) A schedule 13D is only for individual investors whereas a schedule 13G is for institutional investors D) A schedule 13D is for activist investors whereas a schedule 13G is for passive investors

D) A schedule 13D is for activist investors whereas a schedule 13G is for passive investors

What is the primary use of Form 8-K? A) To offer official notification to various classes of shareholders of matters to be brought to a vote at a shareholders meeting B) For registrants to report quarterly financials, management discussion and analysis, and any changes in accounting principles C) To report equity holdings by institutional investment managers having equity assets under management of $100 million or more D) For registrants to report the occurrence of any unscheduled material events or corporate changes which could be deemed important to investors or security holders and previously have not been reported by the registrant

D) For registrants to report the occurrence of any unscheduled material events or corporate changes which could be deemed important to investors or security holders and previously have not been reported by the registrant

Which of the following items are contained within a Management's Discussion and Analysis section of a registrant's 10-K? I. Liquidity II. Capital resources III. Results of operations IV. Off-balance sheet arrangements A) I and II only B) I and III only C) I, II, and III only D) I, II, III, and IV

D) I, II, III, and IV

Which of the following information items must be reported by an institutional investment manager on Form 13F? I. The date on which each manager at the firm was hired II. Fair market value of securities held as of the end of the calendar quarter III. The salary and bonus of each manager at the firm making over $1 million per year IV. A description of the class of securities held as of the end of the calendar quarter A) I and III B) I and IV C) II and III D) II and IV

D) II and IV

Which of the following would be considered "institutional investment managers?" I. the trust department of a bank managing $75 million in assets II. an entity that exercises investment discretion over other accounts totaling $125 million in assets III. an entity that either invests in, or buys and sells, securities for its own account with $80 million in assets IV. a pension fund that manages its own investment portfolio with $110 million in assets A) I and III B) I and IV C) II and III D) II and IV

D) II and IV

What information in contained in Part III of the company's annual 10-K report? A) Exhibits and financial schedules B) The business & its operations C) Audited statements and management's discussion D) Information on directors, officers, and stock ownership

D) Information on directors, officers, and stock ownership

What information is covered in Part III of a company's 10-K? A) Exhibits and financial schedules B) The business and its operations C) Audited financial statements and management's discussion D) Information on directors, officers, pay and stock ownership

D) Information on directors, officers, pay and stock ownership

The section in a company's 10-K and 10-Q that provides additional insight into the prior reporting period's financial performance is known as A) Risk Factors B) Quantitative and Qualitative Disclosures About Market Risk C) Notes to Consolidated Financial Statements D) Management's Discussion and Analysis

D) Management's Discussion and Analysis

A company's CEO makes an unintentional selective disclosure of material information to an analyst. As a result, the CEO arranges to give a speech to a large audience at a public gathering the next day. If the same material information is disclosed in this speech, will it meet requirements of Regulation FD? A) Yes, because the audience for the speech is considered a representative public body. B) Yes, provided the speech text is provided to every attendee. C) No, because such a speech will not be considered "prompt" disclosure. D) No, because such a speech is not considered broad public disclosure.

D) No, because such a speech is not considered broad public disclosure.

Quarterly reports must be filed on Form A) 8-K B) 10-Q C) 10-K D) N-Q

B) 10-Q

Which of the following items of information are required in a 10-K filing but not in a 10-Q filing? A) Description of the issuer's business B) Audited financial reports C) Management's Discussion & Analysis D) Disclosure of material events

B) Audited financial reports

The financial statements contained in Form 10-K are audited in accordance with A) Financial Industry Regulatory Authority (FINRA) B) Generally Accepted Accounting Principles (GAAP) C) National Association of Securities Dealers (NASD) D) New York Stock Exchange (NYSE)

B) Generally Accepted Accounting Principles (GAAP)

In what Part of a company's Form 10-K would audited financial statements be found? A) Part I B) Part II C) Part III D) Part IV

B) Part II

All of the following types of organizations are exempt from the ongoing reporting requirements of the '34 Act EXCEPT A) Educational institutions B) Fraternal or charitable organizations C) Companies with less than 5,000 shareholders D) Separately regulated insurance companies

C) Companies with less than 5,000 shareholders

The final proxy statement filed with the SEC for an ordinary annual shareholder meeting is also known as A) DEFM14A B) PREM14A C) DEF14A D) PRE14A

C) DEF14A

If an officer or director acquires additional shares after filing Form 3, those changes must be reported on A) Schedule 14A B) Form 33 C) Form 4 D) Form 13D

C) Form 4

Foreign institutional investment managers who use means of United States interstate commerce and exercise investment discretion of $100 million or more would be required to file a A) Form 13P B) Form 13G C) Form 13D D) Form 13F

D) Form 13F