Table Of ContentSEC R
EPORTING
BY BDO USA, LLP UNDER THE DIRECTION OF THE NATIONAL
ASSURANCE GROUP
Notice to readers
SEC Reporting is intended solely for use in continuing professional education and not as a
reference. It does not represent an official position of the American Institute of Certified Public
Accountants, and it is distributed with the understanding that the author and publisher are not
rendering legal, accounting, or other professional services in the publication. This course is
intended to be an overview of the topics discussed within, and the author has made every attempt
to verify the completeness and accuracy of the information herein. However, neither the author
nor publisher can guarantee the applicability of the information found herein. If legal advice or
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© 2019 Association of International Certified Professional Accountants, Inc. All rights reserved.
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ISBN 978-1-11972-442-1(Paper)
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Course Code: 736796
SECR GS-0419-0A
Revised: December 2019
Table of Contents
Chapter 1 1-1
The SEC and the Laws It Administers 1-1
The securities statutes 1-2
The Securities and Exchange Commission 1-29
The SEC’s electronic filing system 1-40
Relationship between the accounting profession and the SEC 1-44
Internal control over financial reporting 1-53
The SEC’s website 1-57
Chapter 2 2-1
Going Public: An Overview 2-1
Making the decision 2-3
Preparing the registration statement 2-14
SEC review and the cooling-off period 2-18
Amendments and closing 2-23
Post-effective amendments 2-27
Internet stock offerings 2-28
Review questions 2-30
Chapter 3 3-1
SEC Reporting: The Key Rules 3-1
General instructions to the forms 3-3
Regulation S-X 3-5
Additional guidance for auditors 3-8
Regulation S-K 3-38
SEC interpretive releases 3-40
Financial reporting policies 3-42
Accounting and Auditing Enforcement Releases 3-45
Staff Accounting Bulletins 3-46
Staff Legal Bulletins 3-53
Emerging Issues Task Force 3-58
Financial Reporting Manual 3-59
Consultations with SEC staff 3-60
Discussion topics, review questions, and cases 3-62
© 2019 Association of International Certified Professional Accountants. All rights reserved. Table of Contents 1
Chapter 4 4-1
The Annual Report: Form 10-K 4-1
The content of Form 10-K 4-7
Facing page 4-8
Part I of Form 10-K 4-9
Part II of Form 10-K 4-14
Part III of Form 10-K 4-52
Part IV of Form 10-K 4-76
Annual report to shareholders and the summary annual report 4-79
Extensions and exceptions 4-81
Review questions 4-83
Chapter 5 5-1
Registration Statements 5-1
Registration statement forms 5-2
Information required in a registration statement 5-3
Securities offering reform 5-6
Smaller reporting company regulatory relief 5-12
Emerging Growth Companies 5-13
Exempt offerings 5-14
Review questions 5-17
Chapter 6 6-1
The Quarterly Report: Form 10-Q 6-1
Filing requirements: Who, when, and where 6-2
The content of Form 10-Q 6-7
Part I — Financial information 6-9
Part II—Other information 6-19
Omission of information by certain wholly owned subsidiaries 6-24
Review questions and cases 6-25
Chapter 7 7-1
The Current Report: Form 8-K 7-1
Filing requirements — Who, when, where 7-2
Events to be reported 7-4
Signatures 7-33
Review questions and cases 7-36
© 2019 Association of International Certified Professional Accountants. All rights reserved. Table of Contents 2
Chapter 8 8-1
Proxy Statements 8-1
Regulation 14A 8-3
Information to be furnished to security holders 8-6
Information on the nominating, audit, and compensation committees 8-7
Proxy statements: Voting on compensation plans 8-15
Proxy filing requirements 8-21
Shareholder director nominations 8-24
Shareholder proposals 8-25
Proxy statements: Financial information 8-27
Tender offers 8-33
Review questions 8-34
Chapter 9 9-1
Reporting by Smaller Public Companies 9-1
Smaller reporting company regulatory relief rules 9-2
Small business compliance guides 9-18
COSO guidance for smaller public companies 9-19
Review questions 9-20
Chapter 10 10-1
PCAOB Standard-Setting and Other Activities 10-1
PCAOB standard-setting and other activities 10-2
PCAOB standard-setting activities 10-4
Other PCAOB guidance 10-25
PCAOB rules and amendments 10-86
PCAOB staff questions and answers related to rules 10-98
International inspection program 10-105
The PCAOB’s website 10-106
Review questions 10-107
Chapter 11 11-1
Emerging Growth Companies 11-1
Eligibility requirements 11-2
Scaled disclosure provisions 11-4
Interpretive guidance 11-6
Glossary Glossary 1
Index Index 1
© 2019 Association of International Certified Professional Accountants. All rights reserved. Table of Contents 3
Solutions Solutions 1
Chapter 1 Solutions 1
Chapter 2 Solutions 5
Chapter 3 Solutions 8
Chapter 4 Solutions 20
Chapter 5 Solutions 28
Chapter 6 Solutions 32
Chapter 7 Solutions 39
Chapter 8 Solutions 56
Chapter 9 Solutions 61
Chapter 10 Solutions 65
Chapter 11 Solutions 71
© 2019 Association of International Certified Professional Accountants. All rights reserved. Table of Contents 4
Chapter 1
The SEC and the Laws It Administers
Learning objectives
Identify the major securities laws.
Recall how the SEC is organized.
Identify the relationship between the SEC and the accounting profession.
Notice to readers: Links are included throughout the text to direct participants to relevant websites. If
these websites do not appear when typed into a web browser, copy the links into a search engine to be
redirected to the proper web page.
© 2019 Association of International Certified Professional Accountants. All rights reserved. 1-1
The securities statutes
The Securities Act of 1933 (Securities Act or the 1933 Act) and the Securities Exchange Act of 1934
(Exchange Act or the 1934 Act) are the principal securities statutes. In addition, there are other principal
acts that are associated with the securities: The Trust Indenture Act of 1939, the Investment Company
Act of 1940, the Investment Advisers Act of 1940, the Securities Investor Protection Act of 1970, and
the Public Company Accounting Reform and Investor Protection Act of 2002 (Sarbanes-Oxley). The
Dodd-Frank Act, the Jumpstart Our Business Startups (JOBS) Act, and the Fixing America’s Surface
Transportation (FAST) Act affected the securities statutes but are not administered by the SEC. The SEC
also serves as an adviser to the United States district courts in connection with Federal Bankruptcy Act
reorganization proceedings involving registrants.
The primary objectives of these securities statutes (and of the SEC’s duties under the Bankruptcy Reform
Act of 1978) are summarized as follows.
Securities Act of 1933
The Securities Act of 1933 defines security as
Any note, stock, bond, debenture, evidence of indebtedness, certificate of interest or participation
in any profit-sharing agreement, collateral-trust certificate, reorganization certificate or
subscription, transferable share, investment contract, voting trust certificate, certificate of deposit
for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any
interest or instrument commonly known as a “security,” or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to or purchase, any of the foregoing.
The Securities Act, sometimes referred to as the “truth in securities” act, has two primary objectives. First,
it requires an issuer offering securities to the public in interstate commerce or through the mail, unless
specifically exempted, to file a registration statement with the SEC containing financial and other
information about the issuer and the offering. Registration of securities, however, does not imply
approval of the issue by the SEC or insure investors against loss, but rather serves to provide consistent
information investors may use to make informed investment decisions.
Second, the Securities Act contains anti-fraud provisions that apply to the sale of securities, whether or
not registered, and imposes civil liabilities and criminal penalties on persons involved with registration
statements containing false and/or misleading information.
Common Securities Act forms are discussed in a later chapter.
© 2019 Association of International Certified Professional Accountants. All rights reserved. 1-2
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 (1934 Act or Exchange Act), as amended, is primarily concerned
with the trading and ongoing reporting related to registered securities. Section 12 of the Exchange Act
contains registration requirements for companies (1) whose securities are listed or traded on a national
securities exchange or in certain over-the-counter markets [Section 12(b)] or (2) whose assets are greater
than $10 million and that have a class of equity securities (i) held by at least 2,000 persons at year-end, or
(ii) held by more than 500 persons who are not accredited investors (nonpublic banks and bank holding
companies are not subject to the 500 unaccredited investor threshold) [Section 12(g)].
Companies that seek to have their securities listed and registered for public trading on an exchange,
including the over-the-counter bulletin board (OTCBB), must file a registration application with the
exchange and a registration statement with the SEC. Following the registration of their securities, the
companies must file annual and other periodic reports to keep current the information contained in the
original filing. The Exchange Act also requires the filing of other annual and periodic reports with the SEC
for such companies.
The 1934 Act requires the SEC to perform the following functions:
Regulate stock exchanges, brokers, and company insiders.
Control proxy solicitation, tender offers, and going-private transactions.
Control amounts of credit used in the trading markets.
Regulate transfer agents, clearing agencies, and brokers who deal exclusively in municipal securities
(this element was added by the Securities Acts Amendments of 1975).
The 1934 Act also provides for
restrictions on the activities of insiders and the reporting of their security holdings and holdings
changes;
reporting of security holdings and changes by others;
compliance with the record-keeping and internal control provisions of the Foreign Corrupt Practices Act;
the prohibition of manipulation and deceptive devices in the offer, sale, or purchase of securities; and
the institution of civil and criminal liabilities for violation of these prohibitions and other provisions of
the 1934 Act.
The Exchange Act is not an update of the Securities Act. The Securities Act deals with the initial offering
of securities; the Exchange Act is concerned with the subsequent trading in those securities.
© 2019 Association of International Certified Professional Accountants. All rights reserved. 1-3
