Going public -- Technical requirements of interest to the independent CPA;

              Going Public—Technical Requirements of Interest to the Independent CPA
by WILBERT H. SCHWOTZER
Partner, Pittsburgh Office
Presented before the Pittsburgh Chapter of the Pennsylvania Institute of Certified Public Accountants—September 1961
YOUR CLIENT has decided to go public, and you want to know the re-quirements that must be met by your client and by you, the CPA. At least you want to have a speaking acquaintance with some of the general problems.
STATE REGULATION
Let me mention first the securities statutes of the various states, sometimes called blue sky laws. Ordinarily the state commissions re­quire
the filing of any prospectus that is to be used, but few of them specify the financial statements that must be furnished. I suggest only that you ask your client's lawyer whether any special work will be required of you for the purpose of the blue sky laws.
SECURITIES ACT OF 1933
Let us now consider the Federal regulation of securities transac­tions.
The Securities Act of 1933 is a disclosure act and an anti-fraud act.1 Today we shall emphasize disclosure. So for our purposes, the Securities Act is to provide full and fair disclosure of the character of securities sold in interstate commerce and through the mails.
PUBLIC OFFERINGS (SECTION 4 OF THE 1933 ACT)2
To accomplish full and fair disclosure, the Securities Act pro­vides
for registration of certain types of securities that are offered to the public.
On the other hand, if your client's securities are not offered to the public but are placed privately, they are not subject to registration with the SEC.
It is difficult to define the term public offering. Some of the de­termining
factors are these: the number of offerees (not purchasers
1 Securities Act of 1933, preamble.
2 See Section 4 for listing of exempt transactions.
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