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Cross 9e TBB Ch28

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Cross 9e TBB Ch28
Chapter 28

Investor Protection and
Corporate Governance

N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.

N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.

TRUE/FALSE QUESTIONS

1. Securities generally do not include any documents evidencing corporate ownership or debt.

ANSWER: F PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

2. The Securities and Exchange Commission (SEC) requires companies to file certain information electronically so that it can be posted on the SEC’s EDGAR database.

ANSWER: T PAGES: Section 1 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

3. All securities transactions must be registered with the Securities and Exchange Commission—there are no exemptions.

ANSWER: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

4. Once a registration statement has been filed, a waiting period begins while the Securities and Exchange Commission reviews the statement.

ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

5. A well-known seasoned issuer cannot file a registration statement until after it announces a new offering.

ANSWER: F PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

6. Securities offerings in unlimited amounts can be exempt from the registration requirements in certain circumstances.

ANSWER: T PAGES: Section 2 TYPE: = BUSPROG: Analytic AICPA: BB-Legal

7. Most securities can be resold without registration.

ANSWER: T PAGES: Section 2 TYPE: + BUSPROG: Analytic AICPA: BB-Legal

8. Liability can be imposed on those who are negligent in not discovering fraud in connection with a registration statement or prospectus.

ANSWER: T PAGES: Section 2 TYPE: N BUSPROG: Analytic AICPA: BB-Legal

9. The Securities Exchange Act of 1934 applies to companies that have assets in excess of $5 million and
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