Question 1

The following options apply to Questions 37 - 45
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 The following options apply to Questions 37...

Question 2

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 if any information provided in the registration statement causes investors to suffer losses, the accountant could be held liable for damages.

Question 3

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 concerning the unexpected resignation of one or more of the registrant's directors would be disclosed on Form 8-K, as it is a current report filed for event disclosures that are of importance to investors or security holders. Form 8-Q is a quarterly report that provides unaudited financial information and does not typically include information about director resignations.

Question 4

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 5

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. They show how a company's financial statements might look if certain events, such as a merger or acquisition, had occurred during the relevant reporting period. They are not used to disclose unscheduled material events or submitted to shareholders for votes on corporate matters. Additionally, while interim financial statements may not need to be audited, this is not a defining characteristic of pro forma disclosures.

Question 6

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

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) are included in the Form 10-K.

Question 7

Which of the following observations is true of the shelf registration rule?
A) It is an option available to all listed companies.
B) Shelf registration is limited to 25 percent of the company's currently outstanding stock.
C) It allows private placements of an unlimited amount of securities.
D) It allows large companies to select the optimal time to sell their stock.

Accepted Answer

The shelf registration rule allows large companies to select the optimal time to sell their stock. It is not limited to 25 percent of the company's currently outstanding stock, nor does it allow for private placements of an unlimited amount of securities. It is also not available to all listed companies, only those that meet certain criteria.

Question 8

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

Form 10-Q is filed for the first three quarters of the fiscal year, not all four quarters. The fourth quarter is covered by the annual Form 10-K.

Question 9

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 10

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 submitted to shareholders for votes on corporate matters. They contain information about the issues to be voted on and provide shareholders with information about the company's management, executive compensation, and other relevant matters.

Question 11

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. It requires disclosure of certain information regarding the acquiring person, the purpose of the acquisition, and other material information about the securities and the issuer.

Question 12

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 a system developed by the SEC that facilitates the receipt, acceptance, dissemination, and analysis of time-sensitive data filed with it. It aims to increase the efficiency and fairness of securities markets by providing investors with access to corporate filings in a timely and accessible manner.

Question 13

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 to ensure independence and objectivity in the audit process. Option A is incorrect as the act restricts accounting firms from providing both audit and non-audit services to the same company. Option B is incorrect as the auditor should report directly to the audit committee, not to the company's management. Option D is incorrect as the lead audit partner should be rotated at least every five years, and the audit review partner at least every seven years.

Question 14

The following options apply to Questions 37 - 45
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 The following options apply to Questions 37...

Question 15

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 typically requires a comfort letter from an accountant which provides assurance that the company has fulfilled all the accounting requirements in the registration process. The comfort letter is issued by the accountant to the underwriter and is used to assure investors that the financial statements are accurate and complete.

Question 16

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

The FCPA requires publicly held companies to maintain an adequate system of internal control (I) and prohibits individuals associated with U.S. companies from bribing foreign officials for the purpose of securing a contract (II). However, compensating or agents' fees are not disallowed under all circumstances (III).

Question 17

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

This statement is not true because pro forma disclosures are not required only when the company has made an unusual asset exchange or restructuring of indebtedness. Pro forma disclosures may be required in other circumstances, such as when a company undergoes a merger or acquisition, issues new shares of stock, or changes accounting methods.

Question 18

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

Question 19

The following options apply to Questions 37 - 45
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 The following options apply to Questions 37...

Question 20

The following options apply to Questions 37 - 45
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

A "Tombstone ad" is an advertisement that informs investors of an upcoming offering of securities. It typically provides basic information about the offering, such as the type of securities being offered and the underwriters involved.

Quiz 14: Sec Reporting

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

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

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?

Pro forma disclosures are:

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

Which of the following observations is true of the shelf registration rule?

Which of the following statements concerning Form 10-Q 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?

Proxy statements are:

Schedule 13D is filed

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?

According to the provisions of the Sarbanes-Oxley Act,

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?