Securities Act of 1933
has two basic objectives:
• To provide investors with financial and other significant information about securities being offered for public sale.
• To prevent deceit, misrepresentation or fraud in the sale of securities.
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10Ks/10Qs/8Ks:
The SEC requires all publicly traded companies with assets exceeding $10M and whose securities are held by more than 500 owners to file annual and other periodic reports. These reports are available as 10Ks, 10Qs & 8Ks.
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Investment Advisor Act:
The Investment Advisor Act of 1940 requires investment advisors to register with the SEC and abide by its rules and regulations in protecting investors.
The law requires registration only if the amount under management is $25M or more or if the advice is being given to a registered investment company.
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EDGAR online:
The EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system is designed to collect, validate, index and accept electronically transmitted data from companies obligated by law to provide data to the SEC. Users may access (without cost) these data at through Edgar online.
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The Financial Accounting Standards Board (FASB) and
the U.S. Securities and Exchange Commission (SEC)
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Trustees of FAF - nominated by 8 sponsoring organizations:
American Accounting Association; American Institute of Certified Public Accountants; Association for Investment Management and Research; Financial Executives International; Government Finance Officers Association; Institute of Management Accountants; National Association of State Auditors, Comptrollers and Treasurers; and Securities Industry Association.
The Board of Trustees selects an additional five members. (Total membership 13).
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The FAF operates for charitable, educational, scientific, and literary purposes.
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FAF - Financial Accounting Foundation. Funds FASB & GASB, selects members of their boards and also their respective Advisory Councils.
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FAF MEMBERSHIP About 1,000 corporations, banks & other organizations. About 7,000 public accounting firms and individual CPAs.
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Establish financial accounting standards for public companies.
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Establish financial accounting standards for private
companies.
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GASB - Governmental Accounting Standards Board, the state equivalent of the FASB.
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The SEC is comprised of 5 presidential appointed Commissioners with 5-year terms.
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FASB was preceded by the Committee on Accounting Procedure (CAP) of the American Institute of Certified Public Accountants (1936–59) and then by the Accounting Principles Board (APB), also part of the AICPA (1959–73).
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The SEC sets requirements for documents that publicly held companies are required to file with them. Including:
1. Registration statements for newly offered securities
2. Annual and quarterly filings (Forms 10-K and 10-Q)
3. Proxy materials sent to shareholders before an annual meeting
4. Annual reports to shareholders
5. Documents concerning tender offers
6. And filings related to mergers and acquisitions.
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The Securities and Exchange Commission (SEC) was created with through the Securities Exchange Act of 1934. The SEC was given broad authority over the securities industry, including registration, regulation, monitoring of brokerage firms, transfer agents etc.
The SEC was also given regulatory control over what are called Self Regulatory Organizations (SROs). Including in these are the different stock exchanges; the New York Stock Exchange, the American Stock Exchange and the National Association of Securities Dealers (operators of the NASDAQ).
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FASB Standards
The Financial Accounting Standards Board (FASB) is the primary organization establishing financial and accounting standards for the private sector.
The standards developed and propagated by the FASB are officially recognized by the SEC and the American Institute of Certified Public Accountants (AICPA).
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The EITF
The Emerging Issues Task force (EITF) is the group within the FASB that looks at new developments in the financial, accounting and auditing fields. Membership comes primarily from public accounting firms and members of the general public. There are 13 voting members.
The EITF will discuss emerging issues and where consensus is reached (two or less objections), the approach is considered a part of GAAP. Where consensus is not received, the FASB will take up the issue.
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Personal Account Management |
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