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CA1-3 (Financial Reporting and Accounting Standards) Answer the
following multiple-choice questions. (All answers are in bold type.)
1. GAAP stands for:
2. Accounting standard-setters use the following process in
establishing accounting standards:
3. GAAP is comprised of:
4. The authoritative status of the conceptual framework is as follows.
5. The objective of financial reporting places most emphasis on:
6. General-purpose financial statements are prepared primarily for:
7. Economic consequences of accounting standard-setting means:
8. The expectations gap is:
CA 1 – 14 (Securities and Exchange Commission)The U.S. Securities
and Exchange Commission (SEC)was created in 1934 and consists of
five commissioners and a large professional staff. The SEC
professionalstaff is organized into five divisions and several principal
offices. The primary objective of the SEC is tosupport fair securities
markets. The SEC also strives to foster enlightened stockholder
participation in corporatedecisions of publicly traded companies. The
SEC has a significant presence in financial markets, thedevelopment
of accounting practices, and corporation-shareholder relations, and
has the power to exertinfluence on entities whose actions lie within the
scope of its authority.
(a) Explain from where the Securities and Exchange Commission
receives its authority.