Question 1

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, including 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 2

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 also true, as year-to-year comparisons of material changes in the line items should be made. Statement III is false, as management should 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, choice A is the correct answer.

Question 3

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.
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 4

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 5

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 6

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 comprised of non-management members of a company's board of directors in order to ensure their independence and objectivity in overseeing the financial reporting process. Choice A is incorrect because the act prohibits accounting firms from providing both audit and non-audit services to the same company to avoid conflicts of interest. Choice B is incorrect because the auditor should report to the audit committee, not to the management. Choice D is incorrect because the act requires a rotation period of at least five years for the lead audit partner and the audit engagement partner, rather than two years.

Question 7

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 up to the effective date of the registration statement. After that, liability shifts to the issuer and underwriters.

Question 8

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 matters to be voted on and about the company's management and financial performance.

Question 9

The items below are associated with the Securities and Exchange Commission.Describe or explain each item as concisely as possible.
(a)Customary Review
(b)Comment Letter
(c)"Red Herring" Prospectus
(d)"Tombstone Ad"
(e)Financial Reporting Releases
(f)Staff Accounting Bulletins
(g)Accounting and Auditing Enforcement Releases
(h)Management's Discussion and Analysis

Accepted Answer

The answer of The items below are associated with the...

Question 10

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 only when the company has made an unusual asset exchange or a restructuring of existing indebtedness is not true. Pro forma disclosures may be required in other circumstances as well, such as for a significant acquisition or disposition, or for a change in accounting policy.

Question 11

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.
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 12

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

The unexpected resignation of one or more directors is considered a material event that must be reported on Form 8-K within four business days. Form 8-Q is a quarterly report, and does not need to be filed to report such an event in a timely manner.

Question 13

The history of securities regulation can be traced to: A)the stock market crash of 1929. B)medieval times. C)18^th century creation of the New York Stock Exchange. D)18^th century English Parliament's passage of the Bubbles Acts.

Accepted Answer

The answer of The history of securities regulation can be...

Question 14

Which of the following choices best describes correct use of the forms indicated?
A)Option A
B)Option B
C)Option C
D)Option D

Accepted Answer

The answer of Which of the following choices best describes...

Question 15

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 a form required to be filed with the SEC by any person or group who acquires beneficial ownership of more than 5 percent of a class of registered equity securities. This filing discloses information about the ownership, intentions, and plans of the acquiring entity or individual.

Question 16

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 that often take the form of summarized financial statements. These presentations are meant to show investors and analysts how a company's financial statements would look if certain events or transactions had occurred or if certain assumptions had been made. Pro forma disclosures are not audited interim financial statements or materials submitted to shareholders for votes on corporate matters. They are simply a tool used to help investors and analysts understand how a company's financial results might be impacted by different scenarios.

Question 17

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 the company's accountant which indicates that the accounting requirements have been fulfilled in the registration process. A comfort letter is a letter from the auditor of a company that is used to confirm important financial information used in the underwriting process.

Question 18

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 to ensure accurate financial reporting. It also prohibits individuals associated with U.S. companies from bribing foreign officials to secure a contract. However, the FCPA does not disallow compensating agents' fees under all circumstances.

Question 19

Which of the following acts requires that a trustee be appointed for sales of bonds,debentures,and other debt securities of public corporations?
A)Securities Investor Protection Act
B)Trust Indenture Act
C)Investment Company Act
D)Investment Advisors Act

Accepted Answer

The Trust Indenture Act requires that a trustee be appointed for sales of bonds, debentures, and other debt securities of public corporations. This ensures that the interests of bondholders are protected and that the corporation follows the agreed-upon terms of the indenture agreement. The Securities Investor Protection Act pertains to the protection of customers of brokerage firms. The Investment Company Act regulates investment companies such as mutual funds. The Investment Advisors Act regulates investment advisors who provide advice to clients on securities transactions.

Question 20

The Securities Exchange Act of 1934 requires publicly held companies to file periodic financial disclosures as updates of their economic activity.The three basic forms used for this updating are Form 10-K,Form 10-Q,and Form 8-K.
Required:
Describe the information contained in each of the three basic forms noted above.

Accepted Answer

The answer of The Securities Exchange Act of 1934 requires...

Quiz 14: Sec Reporting

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 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?

According to the provisions of the Sarbanes-Oxley Act,

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

Proxy statements are:

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

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 history of securities regulation can be traced to:

Which of the following choices best describes correct use of the forms indicated?

Schedule 13D is filed

Pro forma disclosures are:

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 acts requires that a trustee be appointed for sales of bonds,debentures,and other debt securities of public corporations?