Google Answers Logo
View Question
 
Q: Compulsory financial reporting in US? ( Answered 4 out of 5 stars,   0 Comments )
Question  
Subject: Compulsory financial reporting in US?
Category: Business and Money > Accounting
Asked by: luluk-ga
List Price: $5.00
Posted: 24 Mar 2003 01:57 PST
Expires: 23 Apr 2003 02:57 PDT
Question ID: 180214
1) When did disclosure of financial information first become compulsory in the US?
2) Was there much resistance to this from the business community?
Answer  
Subject: Re: Compulsory financial reporting in US?
Answered By: pafalafa-ga on 24 Mar 2003 05:11 PST
Rated:4 out of 5 stars
 
Hello Luluk-ga, and thank you for an interesting question.

I do a good deal of work on regulating businesses, so I know from
first hand experience that any new law or regulation is met with stiff
resistance from the business community.  This is true today, and was
true in the 1930's when national financial disclosure laws first came
into being.

At the Wisconsin Department of Financial Instiutions site at:

http://www.wdfi.org/fi/securities/regexemp/history.htm

they have a good site entitled "A Brief History of Securities
Regulation".

As you can see from this history, the major laws creating the U.S.
Securities and Exchange Commission, and establishing reporting
requirements, were passed by congress in 1933 and 1934, in response to
the stock market crash of 1929, and the onset of the Great Depression.
 The two key laws to note are the   Securities Act of 1933 and the
Securities Exchange Act of 1934.


Prior to this time, securities were largely regulated at the state
level, and every new law imposing requirements was "vigorously
challenged" by the business community, as the WDFI site notes. 
Business opposition was certainly intact when the federal laws came
into being, but was perhaps somewhat muted due to the public's overall
distrust of the business community following the crash of 1929.

The opposition didn't disappear, however.  As noted in an article in
the Columbia Encyclopedia on the Securities and Exchange Commission:

http://www.bartleby.com/65/se/Securiti.html

"The regulatory measures were at first bitterly opposed by the
financial community, on the ground that they imposed such severe
limitations and liabilities on security issuers and dealers as to
impede the financing of industry."

In fact, the article notes, the business community was successful in
having some of the penalties for misreporting softened in later
legislation.

You might also want to have a look at the SEC's legislative page at:

http://www.sec.gov/about/laws.shtml

which provides a good overview of the major security laws.

I hope this provides what you were looking for, but feel free to post
a Request for Clarification if any additional information is needed.


search strategy:  history "securities exchange commission"
luluk-ga rated this answer:4 out of 5 stars

Comments  
There are no comments at this time.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  


Google Home - Answers FAQ - Terms of Service - Privacy Policy