Question 1

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.
A) I and II
B) II and II
C) I and III
D) I, II, and III

Accepted Answer

I is true as per the FCPA requirements. II is also true as it explicitly prohibits individuals associated with U.S. companies from bribing foreign officials for obtaining business contracts. III is not true as compensating or agents' fees are not entirely disallowed under all circumstances; instead, they need to be adequately documented and justified as reasonable expenses.

Question 2

Schedule 13D is filed
A) by entities that acquire a beneficial ownership of more than 5 percent of a class of registered equity securities.
B) to broadly report material information that is being provided to securities analysts, selected institutional investors, or others.
C) to disclose material items related to asset-backed securities such as a bond issue.
D) by management to report the existence and effectiveness of the company's internal control over financial reporting.

Accepted Answer

Schedule 13D is filed by entities that acquire a beneficial ownership of more than 5 percent of a class of registered equity securities.

Question 3

Accountants are liable for any materially false or misleading information contained in the registration statement filed with the SEC up to:
A) the date the registration statement is filed.
B) the date of the audit report.
C) the effective date of the registration statement.
D) the date securities are sold.

Accepted Answer

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. This means that they must ensure that all information in the registration statement is accurate and complete until the point when securities are sold to the public. The effective date is when the offering becomes effective and securities can be sold.

Question 4

According to the provisions of the Sarbanes-Oxley Act,
A) accounting firms can provide both audit and non-audit services to the same company.
B) the auditor should report directly to, and have its work overseen by, the company's management.
C) audit committees should be composed of non-management members of a company's board of directors.
D) both the lead audit partner and the audit review partner for publicly held companies should be rotated at least every two years.

Accepted Answer

The Sarbanes-Oxley Act requires that audit committees be composed of non-management members of a company's board of directors in order to ensure independence and impartiality in the auditing process. Choice A is incorrect because the Sarbanes-Oxley Act prohibits accounting firms from providing non-audit services to the same company they audit. Choice B is incorrect because the auditor should report to the audit committee, not to the company's management. Choice D is incorrect because the lead audit partner and the audit review partner should be rotated at least every five years, not every two years.

Question 5

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.
A) I, II, and IV
B) II and III
C) I, III, and IV
D) I, II, III, and IV

Accepted Answer

Statement I is true as MD&A should cover the financial statements and other statistical data for the most recent three-year time span.
Statement II is true as MD&A should make year-to-year comparisons of material changes in the line items.
Statement III is false as management is expected to explain the cause(s) of the material changes.
Statement IV is true as disclosure of material off-balance sheet transactions, arrangements, and obligations is required in each annual and each quarterly report.

Question 6

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
A) I
B) II
C) Both I and II
D) Neither I nor II

Accepted Answer

Information regarding the unexpected resignation of one or more of the registrant's directors would be disclosed on Form 8-K, which is used to report important events or significant changes that may be of interest to shareholders or regulators. Form 8-Q is used for quarterly financial reports and does not cover unexpected events like director resignations.

Question 7

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?
A) EDI
B) ESEC
C) EDGAR
D) EMMA

Accepted Answer

EDGAR (Electronic Data Gathering, Analysis, and Retrieval) is the system that helps the SEC accomplish its primary purpose by expediting the receipt, acceptance, dissemination, and analysis of time-sensitive data filed with it. It is an electronic filing system that allows companies to submit important financial information and disclosures to the SEC in a timely and efficient manner.

Question 8

Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description.
Descriptions
a. Provides preliminary information to investors about an upcoming issue.
b. Informs investors of an upcoming offering.
c. Required annual filing to the SEC.
d. Discloses unscheduled material events.
e. Includes amendments to the Securities Act, additional disclosure requirements, and other current issues regarding accounting and auditing principles and standards.
f. Results in a thorough examination by the SEC of a registration statement.
g. 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.
h. Quarterly report to SEC.
i. Includes new or revised administrative practices and interpretations used in reviewing financial statements.
j. Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.
k. Includes Regulations S-X and S-K.
Comment Letter

Accepted Answer

The answer of Each of the following questions names an...

Question 9

Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description.
Descriptions
a. Provides preliminary information to investors about an upcoming issue.
b. Informs investors of an upcoming offering.
c. Required annual filing to the SEC.
d. Discloses unscheduled material events.
e. Includes amendments to the Securities Act, additional disclosure requirements, and other current issues regarding accounting and auditing principles and standards.
f. Results in a thorough examination by the SEC of a registration statement.
g. 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.
h. Quarterly report to SEC.
i. Includes new or revised administrative practices and interpretations used in reviewing financial statements.
j. Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.
k. Includes Regulations S-X and S-K.
"Tombstone ad"

Accepted Answer

The answer of Each of the following questions names an...

Question 10

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
A) I and II
B) I and III
C) II and III
D) I, II, and III

Accepted Answer

Form 10-K includes all three classes of information: management's discussion and analysis, audited financial statements and footnotes, and auditor's opinion on the company's internal control system.

Question 11

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) A comment letter
B) An audit opinion
C) A "red herring" prospectus
D) A comfort letter

Accepted Answer

An underwriter would typically require a comfort letter from an accountant which indicates that the company has fulfilled all the accounting requirements in the registration process. This letter provides assurance to the underwriter that the financial information included in the prospectus is accurate and reliable. A comment letter is a letter from the SEC requesting additional information or clarification on aspects of the registration statement, an audit opinion is an auditor's opinion on the financial statements, and a "red herring" prospectus is an initial prospectus filed with the SEC that does not yet contain a price or number of securities being offered.

Question 12

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.

Accepted Answer

The statement that the SEC requires pro forma disclosures to be presented only when a company has made an unusual asset exchange or restructuring of existing indebtedness is not true. In fact, the SEC requires pro forma disclosures to be presented in a variety of situations, including business combinations, changes in reporting entity, and significant disposition of assets.

Question 13

Which of the following is defined as directly or indirectly having the power to vote the shares or investment power to sell the security?
A) Proxy
B) Significant influence
C) Control
D) Beneficial ownership

Accepted Answer

Beneficial ownership is defined as having the power to vote the shares or investment power to sell the security, either directly or indirectly. The other choices, such as proxy, significant influence, and control, may be related to ownership or decision-making, but they do not specifically refer to the power to vote or sell securities.

Question 14

Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description.
Descriptions
a. Provides preliminary information to investors about an upcoming issue.
b. Informs investors of an upcoming offering.
c. Required annual filing to the SEC .
d. Discloses unscheduled material events.
e. Includes amendments to the Securities Act, additional disclosure requirements, and other current issues regarding accounting and auditing principles and standards.
f. Results in a thorough examination by the SEC of a registration statement.
g. 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.
h. Quarterly report to SEC .
i. Includes new or revised administrative practices and interpretations used in reviewing financial statements.
j. Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.
k. Includes Regulations S-X and S-K .
Customary Review

Accepted Answer

The answer of Each of the following questions names an...

Question 15

The SEC administers many laws and regulations governing the information made in files reports.
Required:
a) What is the difference in issues covered by Regulation S-X and Regulation S-K?
b) How do the issues covered by these regulations differ from the AAERs and SABs?

Accepted Answer

The answer of The SEC administers many laws and regulations...

Question 16

Proxy statements are:
A) filed by an entity that acquires a beneficial ownership of more than 5 percent in a company.
B) interim financial statements need not be audited.
C) materials submitted to shareholders for votes on corporate matters.
D) used to disclose unscheduled material events.

Accepted Answer

Proxy statements are materials that are submitted to shareholders for votes on corporate matters, such as electing board members or approving mergers. They provide important information to shareholders about the company's current state and proposed actions.

Question 17

Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description.
Descriptions
a. Provides preliminary information to investors about an upcoming issue.
b. Informs investors of an upcoming offering.
c. Required annual filing to the SEC.
d. Discloses unscheduled material events.
e. Includes amendments to the Securities Act, additional disclosure requirements, and other current issues regarding accounting and auditing principles and standards.
f. Results in a thorough examination by the SEC of a registration statement.
g. 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.
h. Quarterly report to SEC.
i. Includes new or revised administrative practices and interpretations used in reviewing financial statements.
j. Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.
k. Includes Regulations S-X and S-K.
"Red Herring" Prospectus

Accepted Answer

The answer of Each of the following questions names an...

Question 18

Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description.
Descriptions
a. Provides preliminary information to investors about an upcoming issue.
b. Informs investors of an upcoming offering.
c. Required annual filing to the SEC.
d. Discloses unscheduled material events.
e. Includes amendments to the Securities Act, additional disclosure requirements, and other current issues regarding accounting and auditing principles and standards.
f. Results in a thorough examination by the SEC of a registration statement.
g. 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.
h. Quarterly report to SEC.
i. Includes new or revised administrative practices and interpretations used in reviewing financial statements.
j. Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.
k. Includes Regulations S-X and S-K.
Form 10-K

Accepted Answer

The answer of Each of the following questions names an...

Question 19

Which of the following statements concerning Form 10-Q is NOT true?
A) It is filed for all four quarters.
B) It is the quarterly report to the SEC.
C) It contains an update on significant matters occurring since the last quarter.
D) It includes comparative financial statements prepared in accordance with APB 28.

Accepted Answer

The answer of Which of the following statements concerning Form...

Question 20

Pro forma disclosures are:
A) used to disclose unscheduled material events.
B) interim financial statements need not be audited.
C) materials submitted to shareholders for votes on corporate matters.
D) "what-if" presentations often taking the form of summarized financial statements.

Accepted Answer

Pro forma disclosures are "what-if" presentations, often taking the form of summarized financial statements, which project how the results of a company would look if certain events or transactions occurred, such as mergers, acquisitions or divestitures. They are typically used to provide investors with a better understanding of the potential impact of these events on a company's financial performance.

Quiz 14: Sec Reporting

Schedule 13D is filed

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

According to the provisions of the Sarbanes-Oxley Act,

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

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?

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

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

Which of the following statements concerning pro forma disclosures is not true?

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

The SEC administers many laws and regulations governing the information made in files reports. Required: a) What is the difference in issues covered by Regulation S-X and Regulation S-K? b) How do the issues covered by these regulations differ from the AAERs and SABs?

Proxy statements are:

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

Pro forma disclosures are: