What are the cons of the Securities and Exchange commission?

Expert Solution

Securities Exchange Commission or (SEC) as popularly called are the regulators of the US capital markets. They look after the dealings of public listed companies and prevent events like the misrepresentation of data and insider trading so that investors can have proper readily information about the markets. But there are a few limitations of SEC’s too which needs to be looked into; there are certain provisions in SEC which causes the firms to overstate or understate the financial statements thereby indirectly affecting the revenues and the assets as a whole. In addition to these while, companies are not listed in the market (before their IPO), they do not get a chance to defend their position against the questions posed against them and the risks factors of the company are shown in a bigger way. Individual meetings of the Institutional Investors are shown just before the night of the trading day for the stock and hence individual investors have less information about the big institutional players.

jeff jeffy answered 2 years ago

What is the importance of "The Exchange and Securities Commission" (SEC) in the accounting?

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