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A Comprehensive Guidebook on SEC Compliance

  • Accountant
  • CFE
  • CMA
  • CPA (US)
  • CVA
  • CBA/MCBA
  • CFIRS
  • CWS

Published: June, 2022

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  • Course Description
  • Course Qualification
  • Presenter
  • FAQ

Course Description

Course Description

SEC Segment 1: Structure and Authority

The U.S. Securities and Exchange Commission (SEC) was founded by President Franklin D. Roosevelt in 1934.  It was created by Section 4 of the Securities Exchange Act of 1934  It is comprised of a large independent agency of the United States federal government that was created following the stock market crash in the 1920s to protect investors and the national banking system. The primary purpose of the SEC is to enforce the law against market manipulation. 

 

The SEC created has created a host of regulations that they enforce:

  • The Securities Exchange Act of 1933
  • The Securities Exchange Act of 1934
  • The Trust-Indenture Act of 1939
  • Investment Company Act of 1940
  • Investment Advisers Act of 1940
  • Gramm-Leach Bliley Act of 1999
  • The Sarbanes-Oxley Act of 2002
  • The Dodd-Frank Act of 2010
  • Various other legislations

The SEC has a three-part mission: 

  1. To protect investors
  2. Maintain fair, orderly, and efficient markets
  3. Facilitate capital formation 

With the help of this CPE course, you can learn more about specific SEC structures, functions and responsibilities carried out by various divisions and offices within the Washington D.C. headquarters and regional offices around the country.

 

This CPE course focuses on the purpose and structure of the SEC and its role in financial accounting and reporting compliance for publicly traded companies.  We will also do a high-level introduction to various important forms to file with the SEC. A deep dive into many of these forms will be completed in a separate webinar.

 

SEC Segment 2: Mandates and Programs

As outlined in our introductory course to Understanding the SEC, there are many compliance rules and regulations that publicly traded companies must follow.  In addition, the SEC has far-reaching powers in the oversight of the various legislations and can assess penalties for companies (or accounting firms), who do not adequately comply with those mandates.

While most violations of securities laws are enforced by the SEC and the various securities regulatory organizations it monitors, state securities regulators can also enforce statewide securities blue sky laws. The SEC also works with federal and state law enforcement agencies to carry out actions against actors alleged to violate the securities laws.

SEC Segment 3: Focus on Regulation S-K, S-X, and Form 8-K

As part of the SEC's mission to protect investors, the SEC outlines an abundance of reporting requirements for publicly traded companies.  This course will delve into Regulation S-X, S-K, and 8K which lays out reporting requirements for various SEC filings used by public companies.   

Regulation S-X is a prescribed regulation in the U.S. that lays out the specific form and content of financial reports, specifically the financial statements of public companies. Regulation S-X extends the meaning of the term 'financial statements to include all notes to the statements and all related schedules. Regulation S-X is closely related to Regulation S-K and lays out reporting requirements for various SEC filings and registrations used by public companies. Regulation S-X profoundly affects internal and external accountants, auditors and officers, and numerous officials, employees, and contractors of publicly reporting companies.  Because of the need for accurate reporting, any operation of a company may be affected to require ultimate compliance with Regulation S-X and the Sarbanes-Oxley Act.

In a company's history, Regulation S-K first applies with the Form S-1 that companies use to register their securities with the  SEC as the “registration statement” under the SEC Act of 1933.   Thereafter, Regulation S-K applies to the ongoing reporting requirements in documents such as Forms 10-K and 8-K. 

Regulation S-K applies to:

  • Registration statements under the Securities Act to the extent provided in the forms to be used for registration under that Act.
  • Registration statements under section 12 of the Securities Exchange Act of 1934
  • Annual or other reports under sections 13 and 15(d)
  • Going-private transaction statements under section 13.
  • Tender offer statements under sections 13 and 14;[5]
  • Annual reports to security holders and proxy and information statements under section 14; and
  • Any other documents are required to be filed under the Exchange Act, to the extent provided in the forms and rules under that Act.

A public company is initially impacted by Regulation S-K with its IPO (initial public offering of shares). Form S-1 contains the basic business and financial information on an issuer concerning a specific securities offering. Investors may use the prospectus to consider the merits of an offering and make educated investment decisions. A prospectus is one of the main documents used by an investor to research a company before an initial public offering.

An 8-K is a report of unscheduled material events or corporate changes at a company that could be of importance to the shareholders or the SEC. Also known as a Form 8K, the report notifies the public of events, including acquisitions, bankruptcy, the resignation of directors, or changes in the fiscal year.

This CPE course will provide the participant with an overview of the SEC filing and financial reporting requirements related to Regulation S-K from the accountant's perspective. We will discuss elements that accountants and auditors must be aware of when preparing those filings as well as obtain an understanding of reference materials available.  This includes a discussion of the various sections of regulation S-X and S-K and 8K.

SEC Segment 4: Focus on 10-K and 10-Q

A 10-K is a comprehensive report filed annually by a publicly-traded company about its financial performance and is required by the SEC.  The report contains much more detail than a company's annual report which is sent to its shareholders before an annual meeting. Some of the information a company is required to document in the 10-K includes its history, organizational structure, financial statements, earnings per share, subsidiaries, executive compensation, and any other relevant data.

The SEC requires this report to keep investors aware of a company's financial condition and to allow them to have enough information before they buy or sell shares in the corporation, or before investing in the firm’s corporate bond. 

The 10K includes five distinct sections:

  1. Business. Provides an overview of the company’s main operations, including its products and services
  2. Risk factors. Outline any risks the company faces or may face in the future.
  3. Selected financial data. Details specific financial information about the company over the last five years.
  4. Management’s discussion and analysis of financial condition and results of operations.
  5. Financial statements and supplementary data. This includes the company’s audited financial statements including the income statement, balance sheets, and statement of cash flows. A letter from the company’s independent auditor certifying the scope of their review is also included in this section.

The SEC form 10-Q is a comprehensive report of a company's performance that must be submitted quarterly by all public companies to the SEC. The 10Q is generally an unaudited report.

In the 10-Q, firms are required to disclose relevant information regarding their financial position. There is no filing after the fourth quarter because that is when the 10-K is filed. There are two parts to a 10-Q filing. The first part contains relevant financial information covering the period. This includes condensed financial statements, management discussion, an analysis of the financial condition of the entity, and disclosures regarding market risk and internal controls.

Accountants and auditors must understand all aspects and requirements of the 10K and 10Q process including an understanding of how specific regulations like Sarbanes-Oxley and others are embedded within these statements.  

Because of the depth and nature of the information they contain, 10-Ks are fairly long and tend to be complicated. But investors must understand that this is one of the most comprehensive and most important documents a public company can publish yearly. It is also critical to understand the requirements and expectations of form 10Q.

SEC Segment 5: Rulemaking and Enforcement Process

The Commission's rulemaking process is intended to ensure that aspects of regulatory changes are analyzed before a change takes effect. A need for rulemaking can be identified internally by the Commission or externally by Congress, another government agency, private industry, or the general public.

The rulemaking process usually begins with a rule proposal. , If the Commission approves the rule proposal, it is then presented to the public (through publication in the Federal Register and on the Commission's website) for a specified period.  The public's input is considered as a final rule is crafted. Rules are adopted by a vote of the full Commission.

The Office of the Secretary (OS) reviews rules for compliance with Federal Register requirements, sends related documents to various agencies involved in the process, issues official rulemaking documents, coordinates Commission approval of rules, and maintains certain rule-related files. OS also receives and organizes public comments and then forwards them to the Office of Filings and Information Services (OFIS) and the relevant division staff.

The Division of Enforcement was created in August 1972 to consolidate enforcement activities that previously had been handled by the various operating divisions at the Commission's headquarters in Washington. The Commission's enforcement staff conducts investigations into possible violations of the federal securities laws and litigates the Commission's civil enforcement proceedings in the federal courts and administrative proceedings.

The Commission's mandate is to protect investors. The Commission is not authorized to act on behalf of individual investors. The Commission can bring a variety of administrative proceedings, which are heard by hearing officers and the Commission. One type of proceeding, a cease and desist order, may be instituted against any person who violates the federal securities laws. Concerning regulated entities (e.g., brokers, dealers, and investment advisers) and their employees, the Commission may institute administrative proceedings to, among other things, revoke or suspend registration, or to impose bars or suspensions from employment. In both cease-and-desist proceedings and administrative proceedings against regulated persons, the Commission is authorized, among other things, to order the payment of civil penalties and disgorgement of ill-gotten gains. 

This CPE webinar is to provide an understanding of the SEC’s responsibilities related to rulemaking and enforcement of rules related to the financial markets.  We will examine the rulemaking process and the enforcement process that all accountants and auditors must understand to ensure proper compliance with SEC laws.

This CPE webinar is a part of a series of five webinars:

Modules

  • 1.1 Introduction
  • 00:06:13
  • 1.2 Agenda
  • 00:00:48
  • 1.3 History of securities act
  • 00:07:38
  • 1.4 SEC divisions
  • 00:01:33
  • 1.5 Division of corporate finance and division of finance
  • 00:04:26
  • 1.6 Division of trading and markets
  • 00:05:33
  • 1.7 Division of investment management
  • 00:07:41
  • 1.8 Division of enforcement
  • 00:03:42
  • 1.9 Division of economic and risk anlysis
  • 00:04:00
  • 1.10 SEC Act of 1933
  • 00:04:28
  • 1.11 SEC Act of 1934
  • 00:09:39
  • 1.12 Going public and IPO
  • 00:01:38
  • 1.13 Annual, Quarterly, and Current reports
  • 00:02:23
  • 1.14 Exchange act registration and exceptions
  • 00:04:09
  • 1.15 Forms
  • 00:13:59
  • 1.16 Summary and Ending Speech
  • 00:09:50

  • 2.1 Introduction
  • 00:02:52
  • 2.2 Agenda
  • 00:00:53
  • 2.3 SEC Goals
  • 00:01:35
  • 2.4 SEC Strategic Plan
  • 00:10:45
  • 2.5 SEC Protect Investors
  • 00:06:26
  • 2.6 Maintain fair, orderly and efficient markets
  • 00:05:55
  • 2.7 Facilitate capital formation
  • 00:05:28
  • 2.8 Filing history and EDGAR filing registration
  • 00:08:32
  • 2.9 XBRL overview
  • 00:05:26
  • 2.10 IXBRL vs XBRL
  • 00:03:09
  • 2.11 Enforcement overview
  • 00:06:10
  • 2.12 Rulemaking overview
  • 00:01:35
  • 2.13 Whistleblower rules
  • 00:07:45
  • 2.14 Summary and Ending Speech
  • 00:01:06

  • 3.1 Introduction
  • 00:02:10
  • 3.2 Agenda
  • 00:00:58
  • 3.3 Regulation S-X
  • 00:05:36
  • 3.4 Articles of regulation S-X
  • 00:38:18
  • 3.5 Regulation S-K
  • 00:06:00
  • 3.6 Securities of the registrant item 200
  • 00:01:19
  • 3.7 Financial information item 300
  • 00:09:38
  • 3.8 Management and certain security holders item 400
  • 00:03:50
  • 3.9 Registration statement and prospectus item 500
  • 00:10:07
  • 3.10 Exhibits item 600
  • 00:01:09
  • 3.11 Industry guides item 800 and Roll up transactions item 900
  • 00:03:38
  • 3.12 Introduction of 8-K
  • 00:05:07
  • 3.13 SEC Comment letter process
  • 00:11:46
  • 3.14 Staff accounting bulletins and FR releases
  • 00:03:32
  • 3.15 Summary and Ending Speech
  • 00:08:41

  • 4.1 Introduction
  • 00:04:34
  • 4.2 Agenda
  • 00:00:41
  • 4.3 Who uses the 10-K
  • 00:03:39
  • 4.4 Benefits of 10-K
  • 00:01:30
  • 4.5 Filing dates
  • 00:03:41
  • 4.6 Preparation information
  • 00:01:23
  • 4.7 Signatures
  • 00:01:52
  • 4.8 Critical components of the 10-K
  • 00:01:47
  • 4.9 Section One: Part 1 - 4
  • 00:01:53
  • 4.10 Section II
  • 00:02:09
  • 4.11 Section III and IV
  • 00:05:46
  • 4.12 Part II of 10-K
  • 00:14:42
  • 4.13 Part III of 10-K
  • 00:04:07
  • 4.14 Changes adopted in late 2020
  • 00:10:55
  • 4.15 Example on comparative composition of reports between the year 1999-2020
  • 00:06:57
  • 4.16 Critical components of 10Q
  • 00:07:58
  • 4.17 Filing timing requirements
  • 00:01:38
  • 4.18 Summary and Ending Speech
  • 00:06:25

  • 5.1 Introduction
  • 00:03:22
  • 5.2 Agenda
  • 00:01:55
  • 5.3 Legislation Governing The Securities Industry
  • 00:06:46
  • 5.4 Rulemaking Process
  • 00:18:00
  • 5.5 Roles
  • 00:04:43
  • 5.6 SEC Division of Enforcement
  • 00:05:39
  • 5.7 Civil and Administrative Proceedings
  • 00:10:25
  • 5.8 SEC Enforcement manual and related aspects
  • 00:11:30
  • 5.9 Investigations
  • 00:03:24
  • 5.10 Processing tips
  • 00:03:47
  • 5.11 MUI Process
  • 00:06:49
  • 5.12 Formal Order
  • 00:10:33
  • 5.13 Recent Judgements
  • 00:06:15
  • 5.14 Summary and Ending Speech
  • 00:02:46

Learning Objectives

  • Overview of SEC Act of 1933 and its relevance to public companies and IPO candidates
  • High-level introduction to important forms including Registration Statement, 10K, 10Q, 8-K, Proxy statement, Forms 3, 4, 5, S-1, S-2, S-3, Schedule 13D, Form 144
  • A high-level overview of the SEC rule-making and enforcement process.
  • To examine the critical components involved in each step of the SEC mission statement
  • To evaluate Regulation S-K requirements for information outside the financial statements, including Management's Discussion and Analysis and executive compensation.
  • To examine the various critical components of Regulation S-X requirements for financial statements
  • To examine the five critical component sections of the 10K and understand their usage and benefit to companies and investors. This includes Business, risk factors, selected financial data, management discussion and analysis, and financial statements and supplementary data.
  • To examine the critical components of sections of the 10Q and expectations of investors, employers, and the SEC
  • Overview of the process utilized by the SEC in rule making including the roles played by Market Regulation (MR), Corporate Finance (CF) or Investment Management (IM), the rulemaking divisions as well as the Office of General Counsel (OGC) and Office of Economic Analysis (OEA).
  • To examine the SEC’s enforcement manual and its role in providing guidance in the review of potential violations of federal securities laws.

Recommended For

  • This online CPE webinar is recommended for CFE, CMA, CPA, CVA, CBA/MCBA, CFIRS, CWS, or staff working in the accounts or finance department.

Who Should Attend?

  • Accountant
  • Accounting Firm
  • Accounting Managers
  • Accounts Director
  • Chief Accounting Officer
  • Cloud Accountants
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • CPA in Business
  • Entrepreneurial CPA
  • Senior Accountant
  • Staff of Accounting Firm
  • Young CPA

Course Qualification

Webinar Qualifies For

  • 8 General Credit for Accountant/Bookkeeper/Tax Professionals
  • 8 CPE Credit for Certified Fraud Examiner (CFE)
  • 8 CPE Credit for Certified Management Accountants (CMA)
  • 8 CPE Credit of Finance for Certified Public Accountants (CPA-US)
  • 8 CPE Credit for Certified Valuation Analyst (CVA)
  • 8 CPE Credit for Certified Business Appraiser/Master Certified Business Appraiser (CBA/MCBA)
  • 8 CE Credit for Certified Fiduciary & Investment Risk Specialist (CFIRS)
  • 8 CE Credit for Certified Wealth Strategist (CWS)

Additional details

  • Course Level :
    Basic
  • Credits :
    8
  • Instructional Method :
    QAS Self Study
  • Pre-requisites :
    None
  • Advance Preparation :
    None

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MY-CPE LLC (Sponsor Id#: 143597) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.NASBARegistry.org.

Presenter

About Presenter

Lynn Fountain, CRMA, CPA (US), CGMA, MBA

Owner, Lynn Fountain Consulting and Training

Lynn Fountain has over 39 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance.  Lynn has held two Chief Audit Executive (CAE) positions for international companies.   In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees.  The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.

Ms. Fountain is currently engaged in her own consulting and training practice.  She has successfully executed on several consulting assignments spanning areas of accounting, risk, ERM and internal audit.  She is a highly sought-after trainer and international speaker and has produced hundreds of courses delivered through seminars, conferences and on-demand training.  She is the author of three separate technical books. 

  • Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”.
  • Leading the Internal Audit Function
  • Ethics and the Internal Auditor’s Dilemma

Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials. 


About Company

Lynn Fountain Consulting and Training

www.lynnfountain.net/

Ms. Fountain has become known as an international trainer on topics of Leadership, Internal Audit, Accounting, Finance, Ethics, Business Processes, Bookkeeping, Cybersecurity and Business Issues.  She has over 150 training topics that can be tailored to meet your needs.

Faq

FAQs content

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