Government Regulation

Question 1

What is the primary role of the U.S. Securities and Exchange Commission (SEC)?

Answer 1

To regulate capital markets and protect investors

The SEC enforces financial laws and regulations.

Question 2

What is one of the roles of the Securities and Exchange Commission (SEC) in initial registration for public companies?

Answer 2

Ensuring public disclosure of financial data

The SEC requires public companies to disclose financial data for investor protection.

Question 3

What must a company file with the Securities and Exchange Commission (SEC) after the company goes public?

Answer 3

Form 10-Q and Form 10-K

Public companies are required to file quarterly (Form 10-Q) and annual reports (Form 10-K) with the SEC.

Question 4

According to the Sarbanes-Oxley Act (SOX), what must a company’s annual report include regarding internal control?

Answer 4

An assessment of the effectiveness of the internal control structure and procedures

SOX requires companies to include this assessment for financial reporting.

Question 5

What is the effect of the requirement in the Sarbanes-Oxley Act (SOX) for audit committee independence?

Answer 5

It ensures that committees operate without undue influence from company management

Independence is crucial for objective financial oversight.

Question 6

What is a key requirement for company management under the Sarbanes-Oxley Act (SOX)?

Answer 6

Develop and assess internal controls annually

SOX requires management to annually review and report on the effectiveness of internal controls over financial reporting.