SEC CF Staff Review of Common Financial Reporting Issues Facing Small Issuers (with de Brito Comment)
The SEC released a staff presentation at the Forums on Auditing in the Small Business Environment hosted by the Public Company Accounting Oversight Board. The presentation summarizes key SEC developments on Dodd-Frank Act rules and studies, the Jumpstart Our Business Startups ("JOBS") Act rules and studies, the accommodations available to Emerging Growth Companies ("EGCs"), and the SEC's Statement in Support of Convergence and Global Accounting Standards.
The presentation then describes key areas where CF is focused, which are also described in the Division of Corporation Finance Financial Reporting Manual, Corporation Finance Compliance and Disclosure Interpretations, CF Disclosure Topics and a similar presentation the CF accounting staff gave in 2011. The remainder of the presentation is a practical guide to the types of filings the CF staff reviews, the types of comments the staff gives and types of responses it expects to receive, as well as a more in-depth discussion of common CF staff financial reporting comment areas, including the following:
- reverse mergers,
- disclosure controls and procedures,
- internal controls over financial reporting,
- equity transactions, stock compensation,
- embedded conversion options and free-standing warrants,
- deferred tax valuation allowances,
- Form 8-K Items 4.01 and 4.02, and
- audit reports.
The presentation ends with links to the various SEC sites which should be helpful in explaining the financial and other reporting obligations of smaller companies.
de Brito Comment: Note that while the title of the presentation indicates it will focus on financial reporting issues facing small issuers, the presentation in fact is a very practical, simply written guide to the procedures that should be followed by issuers generally in complying with their various SEC reporting obligations.
Click here to view presentation (links externally to SEC website).