Public Company Reporting Requirements
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CPA Financial Accounting and Reporting (FAR) › Public Company Reporting Requirements
A U.S. public company must file a Form 8-K with the Securities and Exchange Commission (SEC) to report significant corporate events. Which of the following events would most likely trigger the requirement to file a Form 8-K?
The appointment of a new director to the board to fill a vacancy.
A minor amendment to the company's employee stock purchase plan.
The successful negotiation of a new, multi-year contract with a major customer in the ordinary course of business.
The quarterly declaration of a cash dividend consistent with prior periods.
Explanation
The correct answer is B. SEC regulations require the filing of Form 8-K for specific material events. The appointment of a new director, other than at an annual meeting of shareholders, is a specified event under Item 5.02 of Form 8-K. The other events are generally not considered triggering events for an 8-K filing. Routine dividend declarations, signing contracts in the ordinary course of business, and minor plan amendments do not typically require an 8-K filing.
A company is classified as a 'large accelerated filer' by the SEC. What is the deadline for this company to file its annual report on Form 10-K with the SEC after its fiscal year-end?
60 days
75 days
45 days
90 days
Explanation
The correct answer is B. A large accelerated filer, which is a company with a public float of $700 million or more, is required to file its Form 10-K within 60 days after its fiscal year-end. Choice C (75 days) is the deadline for an accelerated filer. Choice D (90 days) is the deadline for a non-accelerated filer. Choice A (45 days) is the deadline for filing a quarterly report on Form 10-Q for all filer types except non-accelerated filers in their first year.
What is a primary distinction between the financial statements included in a public company's quarterly report on Form 10-Q and its annual report on Form 10-K?
The 10-Q financial statements are not required to be filed with the SEC, while the 10-K statements are.
The financial statements in the 10-Q are reviewed by an independent auditor, while the 10-K statements are audited.
The 10-Q includes only a balance sheet and income statement, while the 10-K includes all four required financial statements.
The financial statements in the 10-Q are prepared on a cash basis, while the 10-K statements are on an accrual basis.
Explanation
The correct answer is B. The annual financial statements in a Form 10-K must be audited by an independent registered public accounting firm. In contrast, the interim financial statements included in a Form 10-Q are not required to be audited but must be reviewed by an independent auditor. Both reports use accrual basis accounting, must include a full set of condensed financial statements (though 10-Q is condensed), and both are required filings with the SEC.
Regulation S-K, established by the SEC, provides disclosure requirements for public companies. What type of information does Regulation S-K primarily govern?
The format and content of audited financial statements.
The auditing standards to be followed by independent auditors.
Non-financial statement disclosures, such as Management's Discussion and Analysis (MD&A) and description of the business.
The specific accounting principles that must be followed under U.S. GAAP.
Explanation
The correct answer is D. Regulation S-K sets forth the standard instructions for filing non-financial statement information in registration statements and periodic reports, such as the Form 10-K. It covers qualitative disclosures like MD&A, risk factors, legal proceedings, and executive compensation. Regulation S-X governs the form and content of financial statements (Choice A). FASB sets U.S. GAAP (Choice B). The PCAOB sets auditing standards for public companies (Choice C).
A company is classified as a 'large accelerated filer' by the SEC. What is the deadline for this company to file its annual report on Form 10-K with the SEC after its fiscal year-end?
60 days
75 days
90 days
45 days
Explanation
The correct answer is B. A large accelerated filer, which is a company with a public float of $700 million or more, is required to file its Form 10-K within 60 days after its fiscal year-end. Choice C (75 days) is the deadline for an accelerated filer. Choice D (90 days) is the deadline for a non-accelerated filer. Choice A (45 days) is the deadline for filing a quarterly report on Form 10-Q for all filer types except non-accelerated filers in their first year.
What is a primary distinction between the financial statements included in a public company's quarterly report on Form 10-Q and its annual report on Form 10-K?
The 10-Q financial statements are not required to be filed with the SEC, while the 10-K statements are.
The financial statements in the 10-Q are prepared on a cash basis, while the 10-K statements are on an accrual basis.
The 10-Q includes only a balance sheet and income statement, while the 10-K includes all four required financial statements.
The financial statements in the 10-Q are reviewed by an independent auditor, while the 10-K statements are audited.
Explanation
The correct answer is B. The annual financial statements in a Form 10-K must be audited by an independent registered public accounting firm. In contrast, the interim financial statements included in a Form 10-Q are not required to be audited but must be reviewed by an independent auditor. Both reports use accrual basis accounting, must include a full set of condensed financial statements (though 10-Q is condensed), and both are required filings with the SEC.
Regulation S-K, established by the SEC, provides disclosure requirements for public companies. What type of information does Regulation S-K primarily govern?
The specific accounting principles that must be followed under U.S. GAAP.
The format and content of audited financial statements.
Non-financial statement disclosures, such as Management's Discussion and Analysis (MD&A) and description of the business.
The auditing standards to be followed by independent auditors.
Explanation
The correct answer is D. Regulation S-K sets forth the standard instructions for filing non-financial statement information in registration statements and periodic reports, such as the Form 10-K. It covers qualitative disclosures like MD&A, risk factors, legal proceedings, and executive compensation. Regulation S-X governs the form and content of financial statements (Choice A). FASB sets U.S. GAAP (Choice B). The PCAOB sets auditing standards for public companies (Choice C).
A U.S. public company must file a Form 8-K with the Securities and Exchange Commission (SEC) to report significant corporate events. Which of the following events would most likely trigger the requirement to file a Form 8-K?
A minor amendment to the company's employee stock purchase plan.
The quarterly declaration of a cash dividend consistent with prior periods.
The appointment of a new director to the board to fill a vacancy.
The successful negotiation of a new, multi-year contract with a major customer in the ordinary course of business.
Explanation
The correct answer is B. SEC regulations require the filing of Form 8-K for specific material events. The appointment of a new director, other than at an annual meeting of shareholders, is a specified event under Item 5.02 of Form 8-K. The other events are generally not considered triggering events for an 8-K filing. Routine dividend declarations, signing contracts in the ordinary course of business, and minor plan amendments do not typically require an 8-K filing.