Advanced Accounting Study Notes Fall 2018 TAMUC

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• SEC has statutory authority to o Set accounting principles o Regulate securities markets • Compliance with SEC regulations requires specialized expertise • SEC’s full disclosure mission ... o Provide capital markets with all material information about public companies o Companies listed on U.S. stock exchanges subject to extensive requirements ▪ Affect responsibilities of professional accountants • SEC action to increase regulation triggered by events with harmful impacts on investors and economy • Perceived weaknesses of self-regulation led Congress to enact o Sarbanes-Oxley Act 0f 2002 o Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 Learning Objective 1 p. 746 Discuss why the SEC was established and the principal legislation it enforces. Establishment of the SEC • Established by the Securities Exchange Act of 1934 • Conceived during the worst financial and social crisis in history • Became part of a much broader program of social reform in the face of massive economic problems from 1929-1932, including o High unemployment o Bank failures o Foreclosures o Decline of GNP [Show More]

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