Question 1

Information required in proxy statements includes all except which of the following?

Accepted Answer

A)   listing of company directors and executive officers.
B)   description of the business activities including principal products and sources and availability of raw materials.
C)   market price of the company's common stock for each quarterly period within the two most recent fiscal years.
D)   five-year summary of operations including sales, total assets, income from continuing operations, and cash dividends per share.
E)   two-year summary of industry segments, export sales, and foreign and domestic operations. E

Question 2

Who has the responsibility for the evaluation of the quality of an investment?

Accepted Answer

The investor.

Question 3

What was the purpose of the Securities Exchange Act of 1934?

Accepted Answer

The purpose of the Securities Exchange Act of 1934 was to regulate the trading of previously issued securities through brokers and exchanges.

Question 4

What Federal agency has Congressional responsibility to create auditing and accounting standards?

Accepted Answer

The answer of What Federal agency has Congressional responsibility to...

Question 5

Why is the SEC's Rule 14c-3 important to the accounting profession?

Accepted Answer

The answer of Why is the SEC's Rule 14c-3 important...

Question 6

What are some of the reasons for the corporate scandals of 2001 and 2002?

Accepted Answer

The answer of What are some of the reasons for...

Question 7

What are the responsibilities of the SEC's Division of Corporation Finance?

Accepted Answer

The answer of What are the responsibilities of the SEC's...

Question 8

What is a proxy? Briefly explain the importance of a proxy solicitation.

Accepted Answer

The answer of What is a proxy? Briefly explain the...

Question 9

The SEC's role in the initial registration of securities to be publicly issued is:

Accepted Answer

A)   to ensure that the content of the registration filing is in compliance with securities regulations.
B)   to ensure that securities issued are quality investments.
C)   to provide data to the public regarding first-time issuance of securities.
D)   to give permission to an independent CPA firm to audit the registrant's financial statements.
E)   to make the registrant's annual report available for public viewing.

Question 10

What is blue sky legislation?

Accepted Answer

The answer of What is blue sky legislation?...

Question 11

The goals of the SEC include all except which one of the following?

Accepted Answer

A)   prohibiting the dissemination of materially misstated information.
B)   controlling the number of companies whose stock is listed on major stock exchanges.
C)   regulating the operation of securities markets.
D)   ensuring that full and fair information is disclosed to all investors before the securities of a company are allowed to be bought and sold.
E)   preventing the misuse of information especially by inside parties.

Question 12

Name five securities offerings exempt from registration with the SEC.

Accepted Answer

The answer of Name five securities offerings exempt from registration...

Question 13

What is a private placement of securities?

Accepted Answer

The answer of What is a private placement of securities?...

Question 14

What is the primary focus of the Sarbanes-Oxley Act?

Accepted Answer

A)   Accounting standards and the registration of securities.
B)   Regulation of the continuous reporting by publicly owned companies.
C)   Accounting standards and registration of investment companies that engage in investing and trading in securities.
D)   Accounting standards and penalties against persons who profit from illegal use of inside information.
E)   Regulation of independent audit firms and audit standards.

Question 15

What is a wrap-around filing?

Accepted Answer

The answer of What is a wrap-around filing?...

Question 16

Which one of the following regulates the subsequent trading of securities through brokers and exchanges?

Accepted Answer

A)   The Securities Act of 1933.
B)   The Securities Exchange Act of 1934.
C)   The Investment Company Act of 1940.
D)   The Investment Advisers Act of 1940.
E)   The Sarbanes-Oxley Act of 2002.

Question 17

Name the two broad categories of filings with the SEC.

Accepted Answer

The answer of Name the two broad categories of filings...

Question 18

Audited financial statements in an annual report of an issuer that is subject to SEC regulation must include:

Accepted Answer

A)   three balance sheets, three income statements, and three statements of cash flows.
B)   three balance sheets, two income statements, and two statements of cash flows.
C)   one balance sheet, one income statement, and one statement of cash flows.
D)   two balance sheets, three income statements, and three statements of cash flows.
E)   two balance sheets, two income statements, and two statements of cash flows.

Question 19

EDGAR stands for:

Accepted Answer

A)   Electronic Debits, Gains, Assets and Revenues System.
B)   Electronic Data Gathering, Analysis, and Retrieval System.
C)   Explanatory Data Gathering, Analysis, and Retrieval System.
D)   Explanatory Debits, Gains, Assets and Revenues System.
E)   Electronic Data, Gross Analysis, and Revenues System.

Question 20

Why was the Public Utility Holding Company Act of 1935 created?

Accepted Answer

The answer of Why was the Public Utility Holding Company...

Exam 12: Financial Reporting and the Securities and Exchange Commission