ACCT 1003 Week 1

·         Question 1

The SEC requires all companies, both public and private, to file annually a Form 10-K report.

·         Question 2

The shareholders' letter from the CEO of a firm offers factual information needed to analyze the financial statements.

·         Question 3

Management is responsible for the preparation of the financial statements, including the notes, and the auditor’s report attests to the fairness of the presentation.

·         Question 4

A basic understanding of financial statements is needed due to ongoing financial turmoil and major corporate failures.

·         Question 5

The Sarbanes-Oxley Act of 2002 requires all members of management as well as directors to certify the accuracy of the financial statements.

·         Question 6

Despite the enactment of the Sarbanes-Oxley Act of 2002, corruption and unethical behavior continued in the 2000s.  

·         Question 7

Publicity in the media can impact a firm’s financial performance.

·         Question 8

Financial statements are currently prepared according to generally accepted accounting principles in the U.S.

·         Question 9

An unqualified auditor's report states that the financial statements present fairly the financial position, results of operation, and the cash flows of the entity.   

·         Question 10

A corporate annual report contains three basic financial statements.

Question 11

The management discussion and analysis should contain a discussion of the commitments for capital expenditures, the purpose of such commitments, and expected sources of funding.

·         Question 12

Conglomerates operating in diversified lines of business are required to create separate annual reports for each line of business.

·         Question 13

Annual reports of public companies can only be found on the SEC's EDGAR database.

·         Question 14

The FASB was given Congressional authority to write accounting rules.

Question 15

The notes to financial statements, while helpful, are not an integral part of the statements.

·         Question 16

The goal of the International Accounting Standards Board is the adoption of uniform international accounting standards.

·         Question 17

In 2006, the IASB and the FASB agreed to work on all major projects jointly.

Question 18

The proxy statement offers information about such items as corporate governance, audit-related matters, directors and executive compensation, and related party transactions.

·         Question 19

The management discussion and analysis is of potential interest to the analyst because it contains information that cannot be found in the financial data.

·         Question 20

The Sarbanes-Oxley Act eliminated the need for internal auditors.