part 1.sec

Question 1

sec

Answer 1

was created by congress after the 1929 stock market crash

Question 2

sec

Answer 2

has the legal authority to set accounting standards but has delegated that to the private sector FASB

Question 3

purpose of the sec

Answer 3

• enforces compliance with us GAAP for all public traded companies
• compliance with IFRS for foreign registrants
• promote efficient allocation of capital through open, orderly and fair security markets
• access to information that is decision useful to the market participant is critical

Question 4

foreign private issuer is any non-governmental foreign issuer that

Answer 4

• has the majority of its security owned outside the us
• officers and directors are not us citizens or residents
• the majority of assets are outside the us
• the business is administered principally outside of the us

Question 5

the sec

Answer 5

regulates the initial issuance and subsequent trading of securities

Question 6

sec divisions:

Answer 6

corporate finance: oversees compliance. filings are submitted to this division

enforcement: investigates violations. makes recommendation for punishment

trading and markets: oversees the secondary markets and exchanges; brokers and dealers

investment management: oversees investment advisors and investment companies

Question 7

laws administered by sec

Answer 7

• the securities acts of 1933 & 1934
• the public utility holding company act of 1935
• trust indenture act of 1939
• investment company act of 1940
• investment advisors act of 1940
• securities investor protection act of 1970
• sarbames-oxley act of 2002

Question 8

sec delegates standards settings to the fasb

Answer 8

but sec participates in the setting of the accounting standard

Question 9

sec pronouncements

Answer 9

along with the fasb accounting standard codification comprise authoritative GAAP for public companies

Question 10

private companies

Answer 10

does not have to comply with sec pronouncements