The 1934 Act Is Primarily Intended to

question 20

Multiple Choice

The 1934 Act is primarily intended to

• A)maintain the integrity of the secondary market for securities.
• B)make sure companies who wish to raise money by the sale of securities comply with disclosure requirements for the initial offering.
• C)coordinate federal and state laws with a primary emphasis on allowing the individual states to maintain primary control over securities law.
• D)broaden the SEC's enforcement power.

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Definitions:

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Long-Term Obligations

Financial commitments or debts that are due for repayment beyond the current fiscal year.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors from fraudulent financial reporting by corporations.

Internal Controls

Internal controls are processes and procedures implemented by organizations to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.