SEC Disclosure Effectiveness Initiative and What it Means for Public Companies
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Jen: This is the PKF Texas Entrepreneur’s Playbook, I'm Jen Lemanski and I’m back again with Chip Schweiger, an audit director and one of the faces of our PKF Texas SEC team. Chip, welcome back to the playbook.
Chip: Thanks Jen, great to be here.
Jen: I know that the SEC has proposed to eliminate disclosures and Regulation S-K and amend the requirements to focus on material information for management disclosures and other information and analysis. What does that mean for our public company clients?
Chip: Yeah, so recently the SEC issued authoritative interpretive guidance related to disclosures meant to streamline disclosures for companies and give better information to investors. It’s part of what they're calling their Disclosure Effectiveness Initiative and it really relates to Item 301 selected financial data, Item 302 and then Item 303 in management's discussion and analysis.
Jen: What do they need to do when they're focusing on those?
Chip: Companies formally are required to put five years of financial information in their selected financial data; that's going away. Also, the quarterly information that was previously required to be included in Form 10-Ks is now going away. The SEC believes that the information is already in other documents and can already be found in the companies’ 10-Qs. And as it relates to fourth quarter information, the SEC has stated that anyone can get that information by taking the third quarter 10-Q and matching up against the fourth quarter 10-K.
Jen: Wow, that sounds like a lot. Is there anything else?
Chip: There's actually a number of other initiatives that are in the Disclosure Effectiveness Initiative, so we're suggesting that our clients get with their disclosure counsel or call PKF Texas and we would be happy to help them out.
Jen: Perfect. Well we will get you back to talk about some more SEC related topics, sound good?
Chip: Sounds great.
Jen: For more information about topics affecting public companies visit www.pkftexas.com/secdesk. This has been another Thought Leader production brought to you by PKF Texas - The Entrepreneur’s Playbook. Tune in next week for another chapter.