Question

Answer the following questions: a. What event spurred the creation of the SEC? Why was the SEC created? b. What are the five divisions of the SEC? Briefly describe the purpose of each. c. What are the responsibilities of the chief accountant?

Answer 1

a) securities and exchange act: was established in 1934, post GREAT CRASH in 1929 , post this crash investors lose all confidence,

• This was basically created to boost the investors confidence , investors can easily take decision whether or not buy or sell any property.
• It helps to promote investors education
• Facilitate effecient markets

b) Five divisions of SEC:

• Division of Finance: This division ensures that companies that do trading need to submit financials, updates quarterly etc
• Division of Trading: This division ensures fair trading between buyers and sellers
• Division of Investment: This oversees the funds analyst and advisories
• Division of enforcement: Responsible for investigations, civil actions etc
• Division of Risk : This department does research on how to reduce risk while Trading.

c) role of chief accountant:

• Reporting and analysis to Management
• Train other accountants to discharge their duties effectively
• Prepare financials in accordance with AS'.
• Give some recommendations to the company for improvement
• analyse discrepencies and give solutions