SEC Segment 4: SEC Reporting Focus on 10-K, 10-Q and 8-K

Lynn Fountain, CRMA, CPA, CGMA, MBA

Lynn Fountain Consulting and Training

  • CMA
  • CPA
  • CVA
  • CFE

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Before starting this self study program, please go through the instructional document.

Overview

  • Who uses the 10-K
    6 mins
  • Preparation Information
    15 mins
  • Section II - Selected Financial Data
    22 mins
  • Management discussion and analysis of financial condition and results of operations
    32 mins
  • Relationships and Related Transactions and Director Independence
    45 mins
  • Modernization of Regulation S-K Items 101, 103, and 105
    53 mins
  • Wal-mart Comparative Index 2020 10K-1999 10-K
    61 mins
  • Summary
    75 mins

Course Description

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

  • Business. Provides an overview of the company’s main operations, including its products and services/
  • Risk factors. Outline any and all risks the company faces or may face in the future. 
  • Selected financial data. Details specific financial information about the company over the last five years. 
  • Management’s discussion and analysis of financial condition and results of operations. 
  • 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 and analysis on the financial condition of the entity, disclosures regarding market risk and internal controls.

 It is critical that accountants and auditors understand all aspects and requirements of the 10K and 10Q process including understanding of how specific regulations like Sarbanes-Oxley and others are embedded within these statements.  

Who Should Attend

  • Finance professionals
  • Accounting professionals
  • Auditing Professionals
  • Compliance Professionals
  • Board and Executive management of public companies or companies considering an IPO

Topic Covered

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 on a yearly basis. It is also critical to understand the requirements and expectations of form 10Q.

Learning Objectives

  • To explore the purpose and usage of a company’s 10Q and 10K from a company viewpoint as well as an investor viewpoint.
  • 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
  • Focus on criticality of MD&A, footnotes and risk factor sections.
  • Overview of examples of 10K and 10Q

Who Should Attend?

  • Accountant
  • Accounting Firm
  • Accounting Managers
  • Certified Fraud Examiner
  • Certified Management Accountant
  • Certified Valuation Analysts
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • Entrepreneurial Accountant
  • Entrepreneurial CPA
  • Finance Director
  • Finance Pros
  • Senior Accountant
  • Staff of Accounting Firm
  • VP Finance
  • Young CPA