Multiple Choice: Special Reporting Issues Select the correct answer for each of the following:

1. Which of the following reports typically are not audited by external auditors?

a. Interim financial statements.

b. Consolidated financial statements.

c. SEC 10-K filings.

d. SEC registration filings.

2. The Securities and Exchange Commission:

a. Is primarily interested in full and fair disclosure by companies with publicly traded securities.

b. Prevents risky securities from being issued.

c. Focuses primarily on developing new generally accepted accounting principles.

d. Is the only governmental body that has issued common stock to the public and is publicly controlled.
3. Publicly held companies do not need to notify the Securities and Exchange Commission when:

a. A major division is sold or another company acquired.

b. The company declares bankruptcy.

c. Sales fall more than 20 percent below budgeted amounts.

d. The outside auditor is fired and a new audit firm is hired.
4. Companies must file a registration statement with the SEC when:

a. The company loses a major customer.

b. New securities are issued.

c. A dividend is paid.

d. All of the above.
5A Personal financial statements:

a. Must be prepared in accordance with generally accepted accounting principles used for business enterprises.

b. Report assets at historical cost.
. Exclude unrealized gains on marketable securities.

d. Place emphasis on the net worth of the individual.
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