SEC--pg 73-80

Question 1

What are the SEC Main Purposes

Answer 1

1. Enforces compliance with GAAP for all publicly traded companies
2. Compliance with IFRS for foreign registrants
3. To promote efficient allocation of capital through open, orderly, and fair securities markets
4. Asses to information that is decision- useful to the market participants is critical

Question 2

What is the SEC IDEA?

Answer 2

SEC’s IDEA (Interactive Data Electronic Applications) is a database where financial statement data is stored in the Extensible Business Reporting Language (XBRL)- which tags acounting data into taxonomy allowing users to ease the access of data

Question 3

What is the Office of Chief Accountant?

Answer 3

Most important office for standard setting. High technical expertise, issues position papers for SEC to consider, link between SEC and accounting profession, has oversight of FASB and AICPA, is the voice of the SEC regarding standard-setting issues

Question 4

Laws administered by SEC

Answer 4

1. Securities Acts of 1933 & 1934
2. Public Utility Holding Company Act of 1935
3. Trust Indenture Act of 1939
4. Investment Company Act of 1940
5. Investment Advisors’ Act of 1940
6. Securities Investor Protection Act of 1970
7. Sarbanes-Oxley Act of 2002

Question 5

Financial Statements Required for prospectus of a new security

Answer 5

1. 2 Yrs Balance Sheet
2. 3 Yrs Income Statement, Statement of CF, and Statement of Shareholders’ equity
3. FS must be audited
4. Prior Statements presented on comparative basis
5. SEC requires 5 yrs selected financial info

Question 6

What are the steps in the offering process

Answer 6

Issuer, underwriter, dealer, public

Question 7

What law prohibits the bribing of foreign officials?

Answer 7

The Foreign Corrupt Practices Act of 1977

Question 8

What does the Securities Act of 1934 do?

Answer 8

Regulates the trading of securities after they are issued and requires periodic reporting.

Question 9

Where are SEC committee formal rules found

Answer 9

Code of Federal Regulations

Question 10

What does registration with the Securities and Exchange Commission (SEC) require?

Answer 10

Extensive disclosures about the company, management, and the intended use of the proceeds from the issue.

Question 11

What information does Management Discussion & Analysis (MD&A) cover

Answer 11

The firm’s financial condition, changes in financial condition, results of operations, liquidity, capital resources and operations, and indications in trends, significant events, and uncertainties.

Question 12

Go to Pg 79 Part 1 and look over 10-K

Answer 12

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