Public And Private Company Council

Publicly traded companies are subject to the reporting and disclosure requirements of the Securities Exchange Commission (SEC). The laws that govern the securities industry were established to provide transparency to investors, creditors and shareholders alike. According to Hoyle, Schaefer & Doupnik, (2015) there are seven major disclosure requirements, the first being a five-year summary of operations to encompass sales, assets, income from continuing operations. Followed by a description of business activities, a three year summary of industry segments to include foreign and domestic operations, a list of company directors and executives, quarterly market price of common stock for the last two years, restrictions on the company’s ability to continue paying dividends, and finally, an analysis of the company’s financial condition, changes in the conditions and results of operation.

There are a number of different reporting requirements that are needed to comply with the SEC. These include the provision of financial statements on a quarterly basis (10-Q) along with an annual report (10-K). These statements must adhere to a specific format that governs how financial statements are prepared, and how the information is presented. There are many sections to these forms that must be included. Moreover, the information must be accurate, and prepared to guidelines laid out in the Generally Accepted

SFAC No. 8 addresses the cost constraint on useful financial reporting, “Cost is a pervasive constraint that standard setters, as well as providers and users of financial information, should keep in mind when considering the benefits of a financial reporting requirement.” (SFAC No. 8 BC 3.47) However, the ability to place a dollar value and fully enumerate a cost or benefit is almost an impossible task for standard-setters. Additionally, there is no way to successfully identify and measure all of the economic consequences associated with a new standard. The FASB should be applauded though for advancing uniformity in accounting standards, however; uniform financial reporting suggests a one size fits all approach. “Smaller, non-publicly listed firms (and their auditors) argue that accounting standards are formulated mainly for larger, publicly traded firms” and that “compliance costs are disproportionately higher and the

financial statements” (Waxman, 2013, p. xiii). It is the purpose of this paper to discuss some of

to offer full disclosure on their financial statements. Private companies are not bound to such strict disclosure requirements.

Since the financial crisis investors have become less confident in the companies within the market. In order to restore confidence within the market and the audits of their financial statements Senator Sarbanes and Representative Oxley created the legislation known as the Sarbanes Oxley Act which came into effect in 2002. The legislation created major regulations on company financial reporting and the regulation of it. Forcing management to be accountable for the financial reporting and internal controls within their company and requiring the audit committees to report on their opinion of the company’s internal processes. (Soxlaw.com)

The SEC has three main purposes to serve the U.S. stock market. The first and most important is to protect investors by sustaining economic growth. In a sector as risky as the stock market the most important asset for any investor is to research. The SEC makes sure that publicly traded companies show financial statements so investors don’t blindly make financial decisions. In a private company that is not publicly traded the SEC makes sure that their financial information is not leaked. After this has been done publicly traded companies information is published and available for all to see. With reliable data available to the general public in the financial markets helps in transparency and minimizes fraud. The reason information is made public

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

The SEC reviews reports filed on Form 10-K on a regular and systematic basis for the protection of investors by improving the information quality and the prevention of fraudulent activities in securities trading and markets by finding possible violations of the securities laws. The Division of Corporation Finance is looking for conflicts with Commission rules or the applicable accounting standards or on disclosure that appears to be materially deficient in explanation or clarity. These reviews are required at least once every three years. The Division won’t always review the entire filing. They may only review the financial statements, or in some cases they may only review and examine the filing for a targeted issue.

Companies with more than $10 million in assets and a class of equity securities that is held by more than 500 owners must file annual and other periodic reports, regardless of whether the securities are publicly or privately traded. If a shareholder requests a company’s Form 10-K, the company must provide a copy. In addition, most large companies must disclose on Form 10-K whether the company makes it periodic and current reports available, free of charge, on its website. Form 10-K, as well as other SEC filings may be searched at the EDGAR database on the SEC's website.

Baruch Lev and Feng Gu authors of “The End of Accounting and The Path Forward for Investors and Managers” indicate that over the past 110 years, the structure and content of financial reports has not changed, and that the role that these reports play in influencing the decisions of investors has greatly diminished. Lev and Gu make a case that non-transaction events that are not captured by the financial reports such as those disclosed through 8-k filings with the Securities and Exchange Commission (“SEC”) have a greater impact on stock prices, and thus more useful to investors. In addition, they suggest that one of reasons for the decline in usefulness of financial reports stems from the increase of estimates that has made its way into these reports (Lev and Gu 2016).

The purpose of this research report is to understand of two important concepts from the Conceptual Framework for Financial Reporting----the objective of general purpose financial reporting and qualitative characteristics of useful financial information. In this report, Myer Holdings Ltd is as an example to describe these two concepts. This report includes the analysis on whether the disclosure of PPE from Myer Holdings Ltd meets the requirements of AASB 116, especially the requirements of objective

Ethically, the company must provide any information the SEC seeks, whether the information is positive or negative. The company’s external stakeholders, such as customers and creditors, will value the honesty and transparency reflected in the 8-K filing as well as the forthcoming press release. This company’s reputation can be rebuilt over the course of time with regular, truthful, and accurate corporate communication.

The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general public from fraudulent corporate practices and accounting errors and to maintain auditor independence.   In protecting the shareholders and the general public the SOX Act is intended to improve the transparency of the financial reporting.   Financial reports are to be certified by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) creating increased responsibility and independence with auditing by independent audit firms. In discussing the SOX Act, we will focus on how this act affects the CEOs; CFOs; outside independent audit firms; the advantages and a

To improve our understanding of accounting concepts and become familiar with the contents of a company’s annual report (Form 10-k), and the proxy statement (DEF 14A) which are both filed with the Securities and Exchange Commission (SEC).