Which of the following is the federal, independent agency...

Name: Problem 2, Chapter 4: Principles of Accounting Volume 1: Financial Accounting
Uploaded: 2020-05-07T12:17:35-08:00
Duration: 6 min 21 s
Channel: Puneet Prajapati
Description: Which of the following is the federal, independent agency that provides oversight of public companies to maintain fair representation of company financial activities for investors to make informed decisions? A. IRS (Internal Revenue Service) B. SEC (Securities and Exchange Commission) C. FASB (Financial Accounting Standards Board) D. FDIC (Federal Deposit Insurance Corporation)

Which of the following is the federal, independent agency that provides oversight of public companies to maintain fair representation of company financial activities for investors to make informed decisions? A. IRS (Internal Revenue Service) B. SEC (Securities and Exchange Commission) C. FASB (Financial Accounting Standards Board) D. FDIC (Federal Deposit Insurance Corporation)

Which of the following is the federal, independent agency that provides oversight of public companies to maintain fair representation of company financial activities for investors to make informed decisions?
A. IRS (Internal Revenue Service)
B. SEC (Securities and Exchange Commission)
C. FASB (Financial Accounting Standards Board)
D. FDIC (Federal Deposit Insurance Corporation)

Key Concepts

Securities and Exchange Commission (SEC)

The SEC is a federal independent agency tasked with overseeing the securities markets and protecting investors by ensuring the accuracy and fairness of financial reporting by public companies. It operates autonomously to enforce regulations that promote transparency and accountability in financial practices.

Federal Independent Agency

A federal independent agency is a government entity that operates independently from direct political control, designed to implement and enforce regulations impartially. These agencies are crucial in maintaining checks and balances within the economic and regulatory frameworks by overseeing specific sectors without undue influence.

Regulatory Oversight

Regulatory oversight refers to the process by which a designated authority monitors and enforces compliance with financial reporting standards and legal requirements. This ensures that public companies provide a truthful and fair representation of their financial activities, which is essential for maintaining market integrity.

Investor Protection

Investor protection involves the measures and regulations in place to safeguard investors’ interests by ensuring they have access to accurate and reliable information. It enables investors to make informed decisions and helps sustain confidence in the financial markets through stringent oversight of corporate disclosures.

Transcript

00:01 Okay, so we are going to understand the concept of stock market today.

00:07 Okay, followed by that you will understand the regulatory aspects of the same.

00:21 It refers to the market in which buyers and sellers participate to buy and sell the securities at the best possible price okay so in a general sense everyone is familiar with the stock market which is basically a main platform to raise funds for many types of business ventures let's suppose there is there is a person who is willing to start his business but is now short of funds so we where should he go? he should go to stock market to raise the funds by issuing different types of financial instruments.

01:55 But in case of stock market, there are only shares which can be issued by the company who is having short of funds.

02:06 Now what is the stock market? it refers to the market in which buyers and sellers participate to buy and sell the securities.

02:20 What type of securities? only shares in stock market there are only shares at the best possible price okay now what happens there is a authority also there are many specs related to stock market let's say there are insider trading what is in insider trading see there are many big companies that are listed on stock exchanges okay so what happens when there is an inherent excess of employees working in those corporations who are listed on the stock exchanges manipulate these stock prices on the stock market because of having inherent access to public sensitive information that information which is not required to be disclosed to the public so there comes insider trading so insider is used for or employee, employee of the company whose shares are listed on the stock exchange.

03:38 Okay, so an employee who is having access to such sensitive information would likely to be, you know, manipulate the prices on the stock exchange.

03:50 And there are, they come also, buyer and seller protection.

03:57 There are lot of intermediaries involved in the stock market process.

04:02 Like portfolio manager, mutual fund distributors, stock, broker, okay? so there are many types of intermediaries involved in the stock market.

04:11 Now what happens? buyers and sellers dealing with such type of intermediaries will not be fooled.

04:18 Okay.

04:19 So that is why the responsible authority, okay, prepare rules regarding that...

Please give Ace some feedback