Question 1

Which division of the SEC develops and administers the disclosure requirements for the securities acts and reviews all registration statements and other issue-oriented disclosures?
A)Division of Enforcement
B)Division of Corporation Finance
C)Division of Investment Management
D)Division of Market Regulation

Accepted Answer

The Division of Corporation Finance develops and administers the disclosure requirements for the securities acts and reviews all registration statements and other issue-oriented disclosures. The Division of Enforcement is responsible for enforcing the federal securities laws. The Division of Investment Management is responsible for regulating investment companies and investment advisers. The Division of Market Regulation is responsible for ensuring the fairness and efficiency of the securities markets.

Question 2

Which regulation created the Securities and Exchange Commission?
A)Securities Act of 1933
B)Securities Exchange Act of 1934
C)Investment Company Act of 1940
D)Garn-St.Germain Depository Institutions Act of 1982

Accepted Answer

The Securities and Exchange Commission was created by the Securities Exchange Act of 1934, which was enacted to regulate the secondary trading of securities and create a commission to enforce federal securities laws. The Securities Act of 1933 was also important in regulating securities offerings and disclosure requirements, but it did not create the SEC. The Investment Company Act of 1940 regulated investment companies and the Garn-St. Germain Depository Institutions Act of 1982 was focused on the savings and loan industry.

Question 3

The Securities and Exchange Commission is responsible for:
A)Option A
B)Option B
C)Option C
D)Option D

Accepted Answer

B

Question 4

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 of 1939 requires that a trustee be appointed to ensure that the interests of bondholders are protected in the event of default or bankruptcy by the issuer. This applies to sales of bonds, debentures, and other debt securities of public corporations. The other acts listed (Securities Investor Protection Act, Investment Company Act, and Investment Advisors Act) do not have this requirement for the appointment of a trustee.

Question 5

Which of the following covers new or revised administrative practices and interpretations used by the SEC staff in reviewing financial statements?
A)Securities Exchange Act releases
B)Exchange Act industry guides
C)Accounting and Auditing Enforcement Releases
D)Staff Accounting Bulletins

Accepted Answer

Staff Accounting Bulletins cover new or revised administrative practices and interpretations used by the SEC staff in reviewing financial statements. Securities Exchange Act releases, Exchange Act industry guides, and Accounting and Auditing Enforcement Releases may provide guidance related to financial reporting but do not specifically cover administrative practices and interpretations used by the SEC staff.

Question 6

Which of the following types of securities or securities transactions are exempt from the need to be registered under the Securities Act of 1933?
I.Commercial paper with a maturity of nine months or less.
II.Intrastate issues in which the securities are offered and sold only within one state.
III.Securities exchanged by an issuer exclusively with its existing shareholders with no commission charged.
A)I and II
B)II
C)I,II,and III
D)III

Accepted Answer

I. Commercial paper with a maturity of nine months or less is exempt under Section 3(a)(3) of the Securities Act.
II. Intrastate issues are exempt under Section 3(a)(11) of the Securities Act.
III. Securities exchanged by an issuer exclusively with its existing shareholders with no commission charged are exempt under Section 3(a)(10) of the Securities Act.

Question 7

The preparation of which of the following items is covered by Regulation S-K?
A)Descriptions of business
B)Pro forma disclosures
C)Schedules
D)Reports of accountants

Accepted Answer

The answer of The preparation of which of the following...

Question 8

Which of the following presents the results of actions taken against accountants,brokers,and other participants for filing false or misleading statements?
A)Financial Reporting Releases
B)Financial Reporting Interpretations
C)Accounting and Auditing Enforcement Releases
D)Staff Accounting Bulletins

Accepted Answer

Accounting and Auditing Enforcement Releases (AAERs) are issued by the SEC to announce enforcement actions against accountants, brokers, and other participants for filing false or misleading statements.

Question 9

Regulation S-X presents the rules for preparing all of the following except:
A)financial statements.
B)footnotes.
C)auditor's report.
D)management's discussion.

Accepted Answer

The answer of Regulation S-X presents the rules for preparing...

Question 10

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 allows them to register securities in advance without selling them immediately, giving them the flexibility to sell securities at a later time when market conditions are more favorable. It is not limited to 25 percent of the company's currently outstanding stock, and it does not allow for private placements of an unlimited amount of securities. It is also not an option available to all listed companies, as it only applies to companies that meet certain size and reporting requirements.

Question 11

In the issuer's annual report,how many years of audited financial statements must be presented?
I.Three years of audited income statements
II.Two years of audited balance sheets
III.Three years of audited statements of cash flows
A)I and II
B)II and III
C)I and III
D)I,II,and III

Accepted Answer

According to generally accepted accounting principles (GAAP) in the U.S., the issuer's annual report must present three years of audited financial statements, including income statements, balance sheets, and statements of cash flows. Therefore, all three choices are correct, and the best answer is D.

Question 12

Which of the following divisions of the SEC regulates national securities exchanges,brokers,and dealers of securities?
A)Division of Investment Management
B)Division of Corporation Finance
C)Division of Corporation Regulation
D)Division of Market Regulation

Accepted Answer

The Division of Market Regulation is responsible for regulating national securities exchanges, brokers, and dealers of securities under the SEC.

Question 13

Regulation S-X and Regulation S-K:
A)govern the preparation of financial statements and associated disclosures.
B)govern the registration requirements for private placements.
C)outline responsibilities for audit committees of publicly held companies.
D)prohibit artificial pyramids of capital in public utilities.

Accepted Answer

Regulation S-X and Regulation S-K both govern the preparation of financial statements and associated disclosures for publicly held companies.

Question 14

Regulation D of the SEC presents important exemptions from full registration requirements for:
A)private placements.
B)issuances of securities by savings and loan associations.
C)issuances of securities by common carriers regulated by the Interstate Commerce Commission.
D)foreign companies.

Accepted Answer

Regulation D provides exemptions for private placements, which are offerings of securities to a limited number of investors who meet certain criteria, such as being accredited investors. The other choices listed do not fall under the exemptions provided by Regulation D.

Question 15

The purpose of a "tombstone ad" is:
A)to inform investors an upcoming offering has been canceled.
B)to inform investors of an upcoming offering.
C)to inform investors an upcoming offering will be delayed for 30 days.
D)to inform investors securities will be offered for sale after the company has responded to the SEC's comment letter.

Accepted Answer

Tombstone ads are advertisements placed by companies in financial publications to inform investors of an upcoming offering of securities. They are typically very simple and provide basic information about the offering.

Question 16

When deficiencies are found in a registration statement that must be corrected before the securities may be offered for sale,which of the following is issued by the SEC?
A)An audit opinion
B)A comment letter
C)A customary review
D)A comfort letter

Accepted Answer

When deficiencies are found in a registration statement, the SEC issues a comment letter to request corrections before allowing the securities to be offered for sale. An audit opinion is issued by an independent auditor on the financial statements of a company, a customary review is a routine review process, and a comfort letter is a letter provided by an auditor that assures the accuracy of the financial statements.

Question 17

Which of the following forms is the most comprehensive registration statement?
A)Form S-1
B)Form F-2
C)Form S-3
D)Form S-2

Accepted Answer

Form S-1 is the most comprehensive registration statement as it is used for the initial registration of securities and requires detailed information about the company, its management, financial statements, risk factors, and other important information that investors need to make informed decisions. Form F-2 is used for the registration of securities by non-US issuers and primarily incorporates information from their home country's regulatory filings. Form S-3 is a simplified registration statement used by companies with a history of timely and complete reporting to register additional securities. Form S-2 is used for the registration of securities issued by closed-end investment companies.

Question 18

Identify the regulation that created an entity which insures investors from possible losses if an investment house enters bankruptcy.
A)Federal Deposit Insurance Protection Act
B)Securities Investor Protection Act
C)Investment Advisers Act
D)Federal Bankruptcy Acts

Accepted Answer

The Securities Investor Protection Act (SIPA) created the Securities Investor Protection Corporation (SIPC), which insures investors from possible losses if an investment house enters bankruptcy.

Question 19

Which of the following best describes a "red herring" prospectus?
A)A shortened version of registration Form S-1 available to those companies that already have publicly traded securities.
B)A prospectus containing material irregularities and deficiencies.
C)Preliminary information provided to investors about an upcoming issue,and issued between the time a registration statement is presented to the SEC and its effective date.
D)Disclosure in the business press,outlined in red,informing investors of an upcoming offering.

Accepted Answer

A "red herring" prospectus is a preliminary document shared with potential investors before the finalization of a public offering. It's issued during the waiting period between when a registration statement is filed with the SEC and when it becomes effective, allowing investors to begin evaluating the investment while the SEC reviews the offering details.

Question 20

Which regulation resulted in the creation of the Public Company Accounting Oversight Board?
A)Investment Advisers Act
B)Securities Investor Protection Act
C)Sarbanes-Oxley Act
D)Trust Indenture Act

Accepted Answer

The creation of the Public Company Accounting Oversight Board resulted from the passage of the Sarbanes-Oxley Act in 2002. The purpose of the Board is to oversee the audit of public companies in order to protect the interests of investors and the public.

Quiz 14: Sec Reporting

Which division of the SEC develops and administers the disclosure requirements for the securities acts and reviews all registration statements and other issue-oriented disclosures?

Which regulation created the Securities and Exchange Commission?

The Securities and Exchange Commission is responsible for:

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

Which of the following covers new or revised administrative practices and interpretations used by the SEC staff in reviewing financial statements?

The preparation of which of the following items is covered by Regulation S-K?

Which of the following presents the results of actions taken against accountants,brokers,and other participants for filing false or misleading statements?

Regulation S-X presents the rules for preparing all of the following except:

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

In the issuer's annual report,how many years of audited financial statements must be presented? I.Three years of audited income statements II.Two years of audited balance sheets III.Three years of audited statements of cash flows

Which of the following divisions of the SEC regulates national securities exchanges,brokers,and dealers of securities?

Regulation S-X and Regulation S-K:

Regulation D of the SEC presents important exemptions from full registration requirements for:

The purpose of a "tombstone ad" is:

When deficiencies are found in a registration statement that must be corrected before the securities may be offered for sale,which of the following is issued by the SEC?

Which of the following forms is the most comprehensive registration statement?

Identify the regulation that created an entity which insures investors from possible losses if an investment house enters bankruptcy.

Which of the following best describes a "red herring" prospectus?

Which regulation resulted in the creation of the Public Company Accounting Oversight Board?