SEC

Question 1

Define “Financial Reporting Releases (FRR)”

Answer 1

Formal pronouncements that rank the highest in authority for public companies.

Question 2

What is the mission of the SEC?

Answer 2

To protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.

Question 3

In order to carry out the mandates in the Securities Act of 1933:

Answer 3

The SEC is ensuring that investors are provided with adequate information on which to base investment decisions.

Question 4

Which SEC division is responsible for overseeing compliance with the securities acts?

Answer 4

Division of Corporate Finance.

Question 5

A foreign private issuer is any foreign issuer other than a foreign government, except an issuer that meets the following conditions:

Answer 5

A. More than 50% of the outstanding voting securities are directly or indirectly owned by residents of the US and
B. Any of the following:
1. The business of the issuer is administered principally in the US
2. More than 50% of the assets of the issuer are located in the US
3. The majority of its executive officers or directors are US citizens or residents.

Rule 205, Securities Act 1933

Question 6

Since 2008, the SEC has permitted foreign private issuers to file their financial statements using:

Answer 6

IFRS as issued by the IASB.

Question 7

What does registration with the SEC require?

Answer 7

Extensive disclosures about the company, management, and the intended use of the proceeds from the issue.

Question 8

How many days after the fiscal year end of a large accelerated filer does a 10-K need to be filed?

Answer 8

Sixty days for large accelerated filers. 75 days for accelerated filers.

Question 9

What law prohibits the bribing of foreign officials?

Answer 9

The foreign Corrupt Practices Act of 1977

Question 10

Where are the SEC formal rules found?

Answer 10

The code of Federal Regulations.

Question 11

Does the SOX Act allow auditors to complete non-audit services for clients?

Answer 11

No

Question 12

What information does the 8-K provide?

Answer 12

Significant events affecting the company.

Question 13

How many years of balance sheet data are required by the SEC?

Answer 13

Two years are required.

Question 14

What are the steps in the offering process?

Answer 14

Issuer, underwriter, dealer, public.

Question 15

Within how many days after the end of the quarter does a company need to file the 10-Q?

Answer 15

Forty days for large accelerated filers and accelerated filers; forty five days for non accelerated filers.

Question 16

How many years of selected financial data are required by the SEC?

Answer 16

Five years are required.

Question 17

How many years of cash flow data are required by the SEC?

Answer 17

Three years

Question 18

What does the Securities Act of 1934 do?

Answer 18

Regulates the trading of securities after they are issued and requires periodic reporting.

Question 19

What balance sheet period is required to be presented on Form 10-Q?

Answer 19

The balance sheet for the end of the preceding fiscal year would have been the last audited balance sheet. This balance sheet is presented along with the current fiscal quarter.

Question 20

Which regulation governs the form and content of financial statement disclosures?

Answer 20

Regulation S-X governs the form and content of financial statements and financial statement disclosures.

Question 21

What does regulation S-K require to be included in the Managements Discussion and Analysis that is part of the 10-K?

Answer 21

The SEC requires that the MD&A provide a “discussion and analysis” on operating results, liquidity, and capital resources, trends, and risks and uncertainties.

Question 22

Large accelerated filer

Answer 22

a company with worldwide market value of outstanding voting and nonvoting common equity held by nonaffiliated of $700 million or more.

Question 23

Accelerated filer

Answer 23

a company with worldwide market value of outstanding voting and nonvoting common equity held by nonaffiliated that is $75 million or more but less than $700 million.

Question 24

Non-accelerated filer

Answer 24

a company with worldwide market value of outstanding voting and nonvoting common equity held by nonaffiliated less than $75 million.