U.S. Securities and Exchange Commission (SEC)

1. The U.S. Securities and Exchange Commission (SEC) is a governmental organization whose mission is to protect investors and oversee capital markets. The SEC requires companies whose stock is traded on U.S. public exchanges to submit financial statements like those introduced in this chapter on a quarterly and annual basis. Anyone can access these statements using the SEC’s EDGAR (Electronic Data Gathering and Retrieval) database system. This exercise will allow you to learn more about the SEC and use its database to access a company’s financial statements. You can access the SEC on the Internet at http://www.sec.gov.

a. When and why was the SEC created?

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b. Name the main divisions of the SEC and briefly explain their function.

c. From the home page, select “Forms and Filings (EDGAR).” Select “search for company filings.” Select “companies and other filers.” In the box beside “company name,” enter the name or part of the name of a company about which you are interested in learning more. You should see a long list of strange letters and numbers like 8-K and 10-K. These designate the type of filing the company has made. Scroll down until you come to a 10-K filing. This is the annual report of the company. Select html and then select the document next to 10-K. Scroll down to the table of contents and select item 8. These are the company’s financial statements. Which financial statements do you see?