Securities Exchange Act of 19 34
Regulates subsequent trading and ongoing reporting of securities sold on U.S. stock exchanges.
Entities having total assets of $10 million or more and 500 or more stockholders are required to register under the Securities Exchange Act.
Requires ongoing filing:
Reviewed quarterly filing (10-Q)
Audited annual reports (10-K)
Form 8-K whenever a significant event takes place affecting the entity.
Authoritative literature for information filed with the S E C.
Financial Reporting Releases (F R Rs)
Staff Accounting Bulletins (S A Bs)
Interpretations of Regulations S-X and S-K.
Section 18 of the Securities Exchange Act of 19 34
Imposes liability on any person who makes a material false or misleading statement in documents filed with the S E C.
The auditor’s liability can be limited if the auditor can show that she “acted in good faith and had no knowledge that such statement was false or misleading”
Number of court cases have limited the auditor’s good-faith defense when the auditor’s action has been judged to be grossly negligent.
