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.
The quarterly declaration of a cash dividend consistent with prior periods.
The successful negotiation of a new, multi-year contract with a major customer in the ordinary course of business.
A minor amendment to the company's employee stock purchase plan.
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?
75 days
60 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 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 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.
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 auditing standards to be followed by independent auditors.
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.
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
90 days
75 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 financial statements in the 10-Q are prepared on a cash basis, while the 10-K statements are on an accrual basis.
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 10-Q financial statements are not required to be filed with the SEC, while the 10-K statements are.
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 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 format and content of audited financial statements.
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 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 successful negotiation of a new, multi-year contract with a major customer in the ordinary course of business.
The appointment of a new director to the board to fill a vacancy.
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.