Quiz 12: Financial Reporting and the Securities and Exchange Commission


1. Unscheduled material measures or changes in corporate field in a company which is important in the view point of shareholders or SEC (Securities Exchange Commission). Need of preparing a report arises which is called form 8-K. D Inc. prepared earliest form of report on October 29, 2013. This current report of Form-8K prepared according to Section 13 or 15 (d) of the Securities Exchange Act, 1934. Form 8-K is prepared in the situations like acquisitions, registration of directors, change in the fiscal year or in the event of bankruptcy. 2. D Inc. filled 10-K for the fiscal year ended February 1, 2013. The total reported net income is $2,372 million reported by D Inc. for the period. 3. 14A proxy statement is prepared for September 24, 2013. In the annual general meeting the following issues were to be voted. • Election of 10 directors. • Ratification of independent auditor. • Advisory vote to approve named executive officer compensation. • Right to Act by written consent.

Place: xxxxx, Date: July 23, 2015. To Senior partner, W Co, CPA Firm. Subject: Requirements must be full filled by CPA firm. The auditor's board must be made up to 5 full time members and must investigate the audits and auditors of the public companies. Requirements must be full filled by CPA firm enumerated as follows: • Two of the five board members must have been CPAs. The remaining three must not been CPAs. • Public companies must fund mandatory fees to the firm. • The board will issue audit standards containing quality control, ethics, scope of operations and other relevant matters. • Auditors report to audit committee but not to managers. • Audit firms must also audit non audit services to the clients. Yours sincerely, xxxxxxxxx.

The correct option is (d) the securities Act of 1933 regulate the initial offering of securities by a company. The objective of Securities Act 1933 is to ensure that investors receive adequate information about the security before the investment. Therefore, it requires the registration of new securities offered for public. The Securities Act 1933 requires the registration of the new securities offered to public. Hence, the correct option is (d).