Public Company Reporting Topics (SEC, EPS, Interim, and Segment)

Question 1

52. what are the 5 commissioners appointed by the President of the United States and what are their functions

Answer 1

• The Division of Corporation Finance—This division oversees the compliance with the securities acts and examines all filings made by publicly held companies. All filings go to this division.
• The Division of Enforcement—When there is a violation of a securities law (except the Public Utility Holding Company Act), this division completes the investigation and takes appropriate actions. This division makes recommendations to the Justice Department concerning any punishments or potential criminal prosecution.
• The Division of Trading and Markets—This division oversees the secondary markets, exchanges, brokers, and dealers.
• The Division of Investment Management—This division oversees the investment advisers and investment companies under the Investment Company Act of 1940 and the Investment Advisers Act of 1940.
• Division of Economic and Risk Analysis—This division was created in 2009 in response to the credit market crisis. The purpose of the division is to integrate financial economics and data analytics into the core mission of the SEC

Question 2

52. What are the two main pronouncements published by the SEC?

Answer 2

• Financial Reporting Releases (FRR) - These are formal pronouncements and are the highest-ranking authoritative source of accounting for public companies.
• Staff Accounting Bulletins (SAB)—These provide the SEC’s current position on technical issues (not formal)

Question 3

52. The SEC enforces the corporate registration requirements of the Securities Act of 1933 as one of its principal objectives. These requirements are intended to provide information that enables the SEC to

Answer 3

Ensure that investors are provided with adequate information on which to base investment decisions.

Question 4

52. which sec reg. governs the form and content of financial statement disclosure?

Answer 4

Regulation S-X

Question 5

59.An inventory loss from a market price decline occurred in the first quarter, and the decline was not expected to reverse during the fiscal year.

However, in the third quarter, the inventory’s market price recovery exceeded the market decline that occurred in the first quarter.

For interim financial reporting, the dollar amount of net inventory should:

• Decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the decrease in the first quarter.
• Decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the market price recovery.
• Decrease in the first quarter by the amount of the market price decline and not be affected in the third quarter.
• Not be affected in either the first quarter or the third quarter.

Answer 5

A:Decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the decrease in the first quarter.

Explanation: When interim period inventory market value declines are not considered temporary (not expected to reverse), they are recognized in the quarter in which the decline occurs. Later recoveries are recognized as gains to the extent of previous losses only. The inventory may not be marked up above cost.

Question 6

59. ASC 270, Interim Reporting, concluded that interim financial reporting should be viewed primarily in which of the following ways?

Answer 6

As reporting for an integral part of an annual period