Question 1

What was the purpose of the Securities Act of 1933?

Accepted Answer

The purpose of the Securities Act of 193

Question 2

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

Accepted Answer

Rule 14c-3 is important to the accountin

Question 3

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

Accepted Answer

A proxy is a form signed by a stockholde

Question 4

Which one of the following requires the maintenance of accounting records and adequate internal accounting controls?

Accepted Answer

A)  The Securities Act of 1933. 
B)  The Securities Exchange Act of 1934. 
C)  The Investment Company Act of 1940. 
D)  The Foreign Corrupt Practices Act of 1977. 
E)  Insider Trading Sanctions Act of 1984. 
A)  The Securities Act of 1933. 
B)  The Securities Exchange Act of 1934. 
C)  The Investment Company Act of 1940. 
D)  The Foreign Corrupt Practices Act of 1977. 
E)  Insider Trading Sanctions Act of 1984.

Question 5

For each of the following situations, identify the type of form to be filed with the SEC for disclosure purposes:
(A) Form 10-K
(B) Form 10-Q
(C) Form 8-K
(D) Not required
___ 1.A unique or significant happening.
___ 2.Annual information required by Regulation S-X.
___ 3.Changes in control of the registrant.
___ 4.Interim financial statements.
___ 5.Fourth quarter income statement.
___ 6.Bankruptcy.
___ 7.Annual information required by Regulation S-K.
___ 8.Income statement for the current quarter, year-to-date, and comparative periods in the previous year.
___ 9.Changes in bookkeeping staff.
___ 10.Changes in the registrant's independent auditor.

Accepted Answer

(1) C; (2) A; (3) C;

Question 6

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. 
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 7

Which one of the following regulates the initial offering of securities by a company or underwriter?

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. 
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 8

Which one of the following prohibits fraudulent and unfair behavior such as sales practice abuses and insider trading?

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. 
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 9

When would a letter of comments be issued by the SEC?

Accepted Answer

A)  To request clarification of a registration statement. 
B)  To convey your pertinent comments to the SEC. 
C)  In response to a company's filing of Form 8-K. 
D)  After receiving the company's Form 10-K. 
E)  To indicate that a registration statement has been approved. 
A)  To request clarification of a registration statement. 
B)  To convey your pertinent comments to the SEC. 
C)  In response to a company's filing of Form 8-K. 
D)  After receiving the company's Form 10-K. 
E)  To indicate that a registration statement has been approved.

Question 10

Which one of the following requires the audit committee to be responsible for the appointment and compensation of the external auditor?

Accepted Answer

A)  The Securities Act of 1933. 
B)  The Securities Exchange Act of 1934. 
C)  The Investment Company Act of 1940. 
D)  The Foreign Corrupt Practices Act of 1977. 
E)  The Sarbanes-Oxley Act of 2002. 
A)  The Securities Act of 1933. 
B)  The Securities Exchange Act of 1934. 
C)  The Investment Company Act of 1940. 
D)  The Foreign Corrupt Practices Act of 1977. 
E)  The Sarbanes-Oxley Act of 2002.

Question 11

Which statement is false regarding the registration of public accounting firms with the PCAOB?

Accepted Answer

A)  Registration is required of all U.S. firms that prepare, issue, or participate in the preparation of an audit report for an entity that issues securities. 
B)  Foreign accounting firms are exempt from registration. 
C)  Disclosure requirements include annual fees received from each issuer for the firm's audit and non-audit services. 
D)  The Public Company Accounting Oversight Board subjects registered firms to periodic inspections. 
E)  Information regarding disagreements between the issuer and the audit firm during the previous year must be disclosed. 
A)  Registration is required of all U.S. firms that prepare, issue, or participate in the preparation of an audit report for an entity that issues securities. 
B)  Foreign accounting firms are exempt from registration. 
C)  Disclosure requirements include annual fees received from each issuer for the firm's audit and non-audit services. 
D)  The Public Company Accounting Oversight Board subjects registered firms to periodic inspections. 
E)  Information regarding disagreements between the issuer and the audit firm during the previous year must be disclosed.

Question 12

What is a wraparound filing?

Accepted Answer

A wraparound filing is a method of filin

Question 13

Which one of the following is not a characteristic of the Public Company Accounting Oversight Board?

Accepted Answer

A)  Minimizes self-regulation in the accounting profession. 
B)  Has the authority to amend, modify, repeal, or reject any audit standard of the ASB. 
C)  Only one member can be an accountant, past or present. 
D)  SEC has oversight and enforcement authority over the Board. 
E)  Enforces auditing, quality control, and independence standards and rules. 
A)  Minimizes self-regulation in the accounting profession. 
B)  Has the authority to amend, modify, repeal, or reject any audit standard of the ASB. 
C)  Only one member can be an accountant, past or present. 
D)  SEC has oversight and enforcement authority over the Board. 
E)  Enforces auditing, quality control, and independence standards and rules.

Question 14

The SEC's operating costs are supported through

Accepted Answer

A)  Tax revenues of the federal government. 
B)  Registration fees from issuers offering securities to the public. 
C)  Fees paid by stock exchanges. 
D)  Fees paid by stockbrokers. 
E)  Fees paid by accounting firms that practice before the SEC. 
A)  Tax revenues of the federal government. 
B)  Registration fees from issuers offering securities to the public. 
C)  Fees paid by stock exchanges. 
D)  Fees paid by stockbrokers. 
E)  Fees paid by accounting firms that practice before the SEC.

Question 15

Which one of the following forms is used when no other form is prescribed?

Accepted Answer

A)  S-4. 
B)  S-3. 
C)  S-11. 
D)  S-8. 
E)  S-1. 
A)  S-4. 
B)  S-3. 
C)  S-11. 
D)  S-8. 
E)  S-1.

Question 16

How are the operations of the SEC funded?

Accepted Answer

The operations of the SEC are

Question 17

Lechter Co.is preparing to issue stock.Its revenues for last year were $85,000,000, and it had $52,000,000 in stock held by non-affiliates.The company had been filing with the SEC for two years.Which one of the following forms should have been used for registration?

Accepted Answer

A)  S-1. 
B)  S-3. 
C)  S-4. 
D)  S-8. 
E)  S-11. 
A)  S-1. 
B)  S-3. 
C)  S-4. 
D)  S-8. 
E)  S-11.

Question 18

When must Form 8-K be filed with the SEC?

Accepted Answer

A)  Within forty-five days of the end of any quarter other than the fourth quarter of the fiscal year. 
B)  Within ninety days of the end of the fiscal year. 
C)  Within fifteen days of the occurrence of certain significant events. 
D)  Within sixty days of the end of the fiscal year. 
E)  When a relatively small company intends to issue securities. 
A)  Within forty-five days of the end of any quarter other than the fourth quarter of the fiscal year. 
B)  Within ninety days of the end of the fiscal year. 
C)  Within fifteen days of the occurrence of certain significant events. 
D)  Within sixty days of the end of the fiscal year. 
E)  When a relatively small company intends to issue securities.

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. 
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

What is the purpose of Regulation S-K? Briefly describe requirements of Regulation S-K.

Accepted Answer

The purpose of Regulation S-K is to esta

Exam 12: Financial Reporting and the Securities and Exchange Commission

What was the purpose of the Securities Act of 1933?

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

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

Which one of the following requires the maintenance of accounting records and adequate internal accounting controls?

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

Which one of the following regulates the initial offering of securities by a company or underwriter?

Which one of the following prohibits fraudulent and unfair behavior such as sales practice abuses and insider trading?

When would a letter of comments be issued by the SEC?

Which one of the following requires the audit committee to be responsible for the appointment and compensation of the external auditor?

Which statement is false regarding the registration of public accounting firms with the PCAOB?

What is a wraparound filing?

Which one of the following is not a characteristic of the Public Company Accounting Oversight Board?

The SEC's operating costs are supported through

Which one of the following forms is used when no other form is prescribed?

How are the operations of the SEC funded?

Lechter Co.is preparing to issue stock.Its revenues for last year were $85,000,000, and it had $52,000,000 in stock held by non-affiliates.The company had been filing with the SEC for two years.Which one of the following forms should have been used for registration?

When must Form 8-K be filed with the SEC?

EDGAR stands for:

What is the purpose of Regulation S-K? Briefly describe requirements of Regulation S-K.

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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