Chapter 14 SEC Reporting

Pro forma disclosures are:

"what-if" presentations often taking the form of summarized financial statements.

What does an underwriter typically require from an accountant which indicates that the company has fulfilled all the accounting requirements in the registration process?

A comfort letter

When deficiencies are found in a registration statement that must be corrected before the securities may be offered for sale, which of the following is issued by the SEC?

A comment letter

Which of the following presents the results of actions taken against accountants, brokers, and other participants for filing false or misleading statements?

Accounting and Auditing Enforcement Releases

Which of the following is defined as directly or indirectly having the power to vote the shares or investment power to sell the security?

Beneficial ownership

The preparation of which of the following items is covered by Regulation S-K?

Descriptions of business

Which division of the SEC develops and administers the disclosure requirements for the securities acts and reviews all registration statements and other issue-oriented disclosures?

Division of Corporation Finance

Which of the following divisions of the SEC regulates national securities exchanges, brokers, and dealers of securities?

Division of Market Regulation

Which system helps the SEC accomplish its primary purpose of increasing the efficiency and fairness of the securities markets by expediting the receipt, acceptance, dissemination, and analysis of time-sensitive data filed with it?

EDGAR

Which of the following forms is the most comprehensive registration statement?

Form S-1

Which of the following statements concerning the management discussion and analysis (MD&A) of a company's financial condition is true? I. It should cover the financial statements and other statistical data for the most recent three-year time span. II. It should make year-to-year comparisons of material changes in the line items. III. Management need not explain the cause(s) of the material changes. IV. Disclosure of material off-balance sheet transactions, arrangements, and obligations is required in each annual and each quarterly report.

I II IV

In the issuer's annual report, how many years of audited financial statements must be presented? I. Three years of audited income statements II. Two years of audited balance sheets III. Three years of audited statements of cash flows

I, II and III so all three

Information concerning the unexpected resignation of one or more of the registrant's directors would be disclosed on which of the following forms? I. Form 8-Q II. Form 8-K

II

staff accounting bulletins

Includes new or revised administrative practices and interpretations used in reviewing financial statements.

accounting and auditing enforcement releases

Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.

Tombstone Ad

Informs investors of an upcoming offering.

Comment letter

Issued by the staff of the SEC and contains differences that must be corrected in a registration statement before the securities may be offered or sale.

Which of the following observations is true of the shelf registration rule?

It allows large companies to select the optimal time to sell their stock.

Which of the following statements concerning Form 10-Q is NOT true?

It is filed for all four quarters.

Which of the following acts helps businesses raise funds in public capital markets by minimizing regulatory requirements?

Jumpstart Our Business Startups (JOBS) Act

Which of the following best describes a "red herring" prospectus?

Preliminary information provided to investors about an upcoming issue, and issued between the time a registration statement is presented to the SEC and its effective date.

Red Herring

Provides preliminary information to investors about an upcoming issue.

Form 10-k

Required annual filing to the SEC.

Customary Review

Results in a thorough examination by the SEC of a registration statement.

Which regulation resulted in the creation of the Public Company Accounting Oversight Board?

Sarbanes-Oxley Act

Which regulation created the Securities and Exchange Commission

Securities Exchange Act of 1934

Identify the regulation that created an entity which insures investors from possible losses if an investment house enters bankruptcy.

Securities Investor Protection Act

Which of the following covers new or revised administrative practices and interpretations used by the SEC staff in reviewing financial statements?

Staff Accounting Bulletins

Which of the following statements concerning pro forma disclosures is not true? A. They show the effects of major transactions that occur after the end of the fiscal period. B. They show the effects of major transactions that have occurred during the year but are not fully reflected in the company's historical cost financial statements. C. The SEC requires these to be presented only when the company has made an unusual asset exchange, or a restructuring of existing indebtedness. D. They often take the form of summarized financial statements.

The SEC requires these to be presented only when the company has made an unusual asset exchange, or a restructuring of existing indebtedness.

Which of the following acts requires that a trustee be appointed for sales of bonds, debentures, and other debt securities of public corporations?

Trust Indenture Act

Which of the following types of securities or securities transactions are exempt from the need to be registered under the Securities Act of 1933? I. Commercial paper with a maturity of nine months or less. II. Intrastate issues in which the securities are offered and sold only within one state. III. Securities exchanged by an issuer exclusively with its existing shareholders with no commission charged.

all three

Which of the following classes of information are included in the Form 10-K? I. Management's discussion and analysis II. Audited financial statements and footnotes III. Auditor's opinion on the company's internal control system

all three of them

According to the provisions of the Sarbanes-Oxley Act?

audit committees should be composed of non-management members of a company's board of directors.

Schedule 13D is filed

by entities that acquire a beneficial ownership of more than 5 percent of a class of registered equity securities.

Regulation S-K

covers all nonfinancial items such, as management's discussion and analysis of the company's operation and present financial position.

Form 8-K

discloses unscheduled material events

The Securities and Exchange commission is responsible for

full and fair disclosure of information regulating securities markets

Regulation S-X and Regulation S-K:

govern the preparation of financial statements and associated disclosures.

Regulation S-X presents the rules for preparing all of the following except:

management's discussion.

Proxy statements are:

materials submitted to shareholders for votes on corporate matters.

Which of the following is true about the Foreign Corrupt Practices Act of 1977 (FCPA)? I. Publicly held companies should maintain an adequate system of internal control. II. Individuals associated with U.S. companies are prohibited from bribing foreign officials for the purpose of securing a contract. III. Compensating or agents' fees are disallowed under all circumstances.

only I and II

Regulation of S-X

presents the rules for preparing financial statements, footnotes, and the auditor's report.

Regulation D of the SEC presents important exemptions from full registration requirements for:

private placements

Form 10-Q

quarterly report to SEC

Accountants are liable for any materially false or misleading information contained in the registration statement filed with the SEC up to:

the effective date of the registration statement.

The purpose of a "tombstone ad" is:

to inform investors of an upcoming offering.