Background on SEC Reporting Requirements

TOPIC 4: Accounting and financial reporting requirements of the Securities and Exchange Commission
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Background on SEC Reporting Requirements
Companies need to comply with the Securities and Exchange Commission
(SEC) reporting requirements, with regulations applied under different circumstances including the S-X, S-K as well as various SEC guidelines. As such, the SEC filings are prepared and reviewed to comply with the SEC regulations including the registration statements, Form 8-K, 10-K and Form 10-Q. Investors and stakeholders rely on financial reporting to make decisions, highlighting the need for strong internal controls. The SEC reviews and comments on the financial reports, and is aimed at ensuring the reporting entities have complied with the reporting requirements. As a regulatory watchdog, the SEC also ensures that the financial information presented is reliable to the extent that it meets the SEC reporting requirements.
General considerations
After the first effective registration for public traded companies need to prepare the 10-Q relevant for the last quarter after the initial registration within 45 days of the end of the fiscal years (SEC, 2015). On the other hand, the 10-Q report is prepared within 45 days after the end of the fiscal year with no requirement of having audited statements (SEC, 2015). The basis of reporting for the domestic issuers is the U.S GAAP, and if otherwise they are deemed to be misleading. However, for the smaller companies, the reporting requirements are not elaborate and they may chose to provide the disclosures focusing on article 8 of the S-X and not other articles. There are is no requirement for additional supplemental schedules under article 8. In the case of business consolidation, if the end year differences for the parent and holding companies are 93 days or less the reporting on the consolidation is permissible. it is necessary to adjust financial reporting period of the financial statements of the subsidiary so as to correspond to that of the parents.
Audited annual financial statements
Domestic registrants require to have audited accounts, including the balance sheet, the income statement comprehensive income, changes in stock holders equity and cash flow. The financial statements are presented with information for 2 years for the smaller companies, but three years for other reporting companies. In exceptional circumstances the unaudited interim financial statements are relied upon. Additionally, when there are business combinations the requirements for preparing the financial statements in the proxy statements will depend on the acquired and target statements. As such, cash is considered when the solicited shareholders are the acquired only business. In case of a disposal the proxy statements soliciting authorizations for disposal ought to include audited statements for the past two financial years and the recent statements for the unaudited interim periods.
Periodic reporting requirements (Exchange Act Filings)
In cases where the companies register offerings of the securities, there is a need to file reports after the date when the balance sheet was included in the registration statement (SEC, 2015). Addition...