The SEC and FASB Are Two Organizations That Are Primarily

question 137

Multiple Choice

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that

• A) they are both governmental agencies.
• B) the SEC is a private organization of accountants.
• C) the SEC often mandates guidelines when no accounting principles exist.
• D) the SEC and FASB rarely cooperate in developing accounting standards.

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Definitions:

Professionals

Individuals who possess specialized knowledge, skills, and often certification, in a particular field or occupation.

Section 11

A provision within the Securities Act of 1933 that allows investors to sue for damages if a registration statement contains untrue statements or omits crucial facts.

Securities Act

A law enacted in 1933 that governs the initial sale of securities (stocks, bonds) by regulating the offer and sale of these securities to protect investors from fraud.

Auditor

A professional who examines the financial records of an organization to ensure accuracy, compliance with standards, and to suggest improvements.