The primary responsibility of security and exchange commissions with respect to financial statements is to
A) set generally accepted accounting principles (GAAP), which must be followed in their preparation.
B) review accounting choices made by companies in their financial statements to ensure decision-making logic is sound.
C) monitor financial statements to ensure full and plain disclosure of material information, thus maintaining compliance with listing requirements.
D) monitor and analyze the information looking for signs of an improved or weakened financial condition.

Question

Quizplus · Accepted Answer

The primary responsibility of security and exchange commissions with respect to financial statements is to monitor financial statements to ensure full and plain disclosure of material information, thus maintaining compliance with listing requirements. This ensures that investors have the information they need to make informed decisions and maintain confidence in the financial markets. While the SEC does play a role in establishing GAAP, this is not their primary responsibility in regard to financial statements. They also do not review accounting choices or analyze financial conditions.

The Primary Responsibility of Security and Exchange Commissions with Respect