The following text from page 4 of “Forensic Accounting – A Growing Niche in the Field of Accountancy” by Dr. Consolacion Fajardo (The Journal of American Academy of Business, Cambridge; Vol. 19; Num. 2; March 2014) seems to be available online from various sources (e.g., http://www.answerbag.com/q_view/155936 from 2006). It is not obvious from the paper that the text is quoted from another source.
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The United States Securities and Exchange Commission (commonly known as the SEC) is a United States government agency having primary responsibility for enforcing the Federal securities laws and regulating the securities industry. The SEC was created by section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d). In addition to the 1934 Act that created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes- Oxley Act of 2002 and other statutes.
The SEC was established by the Congress in 1934 as an independent, non-partisan, quasi-judicial regulatory agency following years of depression caused by the Great Crash of 1929. The main reason for the creation of the SEC was to regulate the stock market and prevent these and other abuses. The SEC was given the power to (1) license and regulate stock exchanges. Currently, SEC is responsible for administering seven major laws that governs the securities industry. They are: Securities Act of 1933, Securities Exchange Act of 1934, Public Utility Holding Company Act of 1935, Trust Indenture Act of 1939, Investment Company Act of 1940, Investment Advisers Act of 1940 and, most recently, Sarbanes-Oxley Act of 2002. The enforcement authority given by Congress allows the SEC to bring civil enforcement against individuals or companies found to have committed accounting fraud, provided false information, engaged in insider trading or violations of other provisions of the securities law. The SEC also works with criminal law enforcement agencies to prosecute individuals and companies alike for severe offenses. To achieve its mandate, the SEC requires that public companies submit quarterly and annual reports, as well as other periodic reports. As part of the annual reporting requirement, the company’s top management must provide a narrative account in addition to the numbers called the “management discussion and analysis” which provides an overview of the previous year of operations and how the company fared in that time period. Management will usually also touch on the upcoming year, outlining future goals and approaches to new projects. In an attempt to level the playing field for all investors, the SEC maintains an online database called EDGAR (the Electronic Data Gathering, Analysis, and Retrieval system) online from which investors can access this information (SEC).
