SEC Reporting

• Chapter 1 - The SEC and the Laws It Administers
  • Learning Objectives
  • The Securities Statutes
    • Securities Act of 1933
    • Securities Exchange Act of 1934
    • Most Commonly Used Exchange Act Forms
    • Public Utility Holding Company Act of 1935
    • Trust Indenture Act of 1939
    • Investment Company Act of 1940
    • Investment Advisers Act of 1940
    • Securities Investor Protection Act of 1970
    • Bankruptcy Reform Act of 1978
    • The Public Company Accounting Reform and Investor Protection Act of 2002
    • Securities Offering Reform
    • Smaller Reporting Company Regulatory Relief
  • The Securities and Exchange Commission
    • Creation of the SEC
    • Regulated Activities
    • Organization of the Commission
    • The Division of Corporation Finance
    • Accountant Communications with the Office of the Chief Accountant
  • The SEC’s Electronic Filing System
    • How to File Electronically
    • XBRL Reporting Program
    • The Future of the SEC’s Electronic Database
  • Relationship between the Accounting Profession and the SEC
    • Regulation of the Accounting Profession
    • Qualification and Independence of Public Accountants
    • Accountants’ Liability
    • Accounting Fraud and Internal Control
  • Internal Control over Financial Reporting
    • COSO
    • Auditing Standards in Response to the Accounting Reform Act
  • The SEC’s Website
  • Questions
• Chapter 2 - Going Public: An Overview
  • Learning Objectives
  • Introduction
  • Making the Decision
    • Advantages and Disadvantages
    • The Securities Markets
    • The Right Decision
    • Selecting the Professionals
    • The Attorneys and Accountants
    • The Underwriter
    • “Gun-Jumping”
  • Preparing the Registration Statement
    • Selecting the Proper Form
    • The Registration Statement and Prospectus
    • Plain English Requirements
    • Filing with the SEC
  • SEC Review and the Cooling-off Period
    • Waiting or Cooling-off Period
    • State Blue Sky Laws
    • SEC Staff Review
    • Comment Letter
    • Road Shows
  • Amendments and Closing
    • Amendments and the Request for Acceleration
    • Supplementary Audit Procedures
    • The Comfort Letter
    • Due Diligence
    • Signing the Underwriting Agreement
    • The Pricing Amendment
    • Withdrawal of the Registration Statement
    • The Effective Date and the Sale of Securities
    • The Offering Period
    • Closing
  • Post-Effective Amendments
    • Updating Financial Statements
  • Internet Stock Offerings
    • Advantages of Internet Stock Offerings
    • Disadvantages of Internet Stock Offerings
  • Questions
• Chapter 3 - SEC Reporting: The Key Rules
  • Learning Objectives
  • Introduction
  • General Instructions to the Forms
  • Smaller Reporting Company Regulatory Relief
  • Regulation S-X
    • Qualifications of Accountants (Rule 2-01 of Regulation S-X)
    • Accountants’ Reports (Rule 2-02 of Regulation S-X)
    • Accountants’ Reports and Attestation on Internal Controls Over Financial Reporting (Rule 2-02(T) of Regulation S-X)
    • PCAOB Guidance on Auditing Adjustments to Prior-Period Financial Statements Audited by a Predecessor Auditor
    • PCAOB Auditing Standard No. 1
    • Retention of Audit and Review Records (Rule 2-06 of Regulation S-X)
    • Communication with Audit Committees (Rule 2-07 of Regulation S-X)
    • General Financial Statement Requirements (Article 3 of Regulation S-X)
    • Rules 3-01 and 3-02
    • Financial Statements of Businesses Acquired or to Be Acquired (Rule 3-05 of Regulation S-X)
    • Consolidated Financial Statements (Rule 3A-02 of Regulation S-X)
    • Chronological Order and Footnote Referencing
    • Additional Disclosures Required by Regulation S-X (Rules 4-08, 5-02, 5-03 and 5-04 of Regulation S-X)
    • Financial Information Regarding Unconsolidated Subsidiaries and 50%-or-Less-Owned Equity Method Investees (Rules 4-08(g) or 3-09 of Regulation S-X)
    • Guarantor Financial Statements (Rule 3-10 of Regulation S-X)
    • Regulation S-X Schedules
  • Regulation S-K
  • Financial Reporting Releases
  • Accounting and Auditing Enforcement Releases
    • Revenue Recognition Problems
    • Delayed Recognition of Losses
    • Miscellaneous Financial Reporting Problems
    • Reliability of Accounting Information
    • Culpability of Auditors
    • Messages to Auditors
    • Company Officers, Directors, and Employees
    • Facilitator Liability
  • Staff Accounting Bulletins
  • Staff Legal Bulletins
  • Emerging Issues Task Force
  • Financial Reporting Manual
  • Consultations with the Staff
    • Consultation with the Office of the Chief Accountant
    • Consultation with the Division of Corporation Finance
  • Discussion Topics, Questions and Cases
    • Discussion Topics
    • Financial Statement Requirements
    • Financial Statement Disclosures
    • Case Studies – Rule 3-05 Financial Statement Requirements
• Chapter 4 - The Annual Report: Form 10-K
  • Learning Objectives
  • Introduction
  • Filing Requirements – Who, When, Where
    • Changing Smaller Reporting Company Status
  • The Content of Form 10-K
  • Facing Page
  • Part I of Form 10-K
    • Item 1 – Business (Item 101 of Regulation S-K)
    • Item 1A – Risk Factors
    • Item 1B – Unresolved Staff Comments
    • Item 2 – Properties (Item 102 of Regulation S-K)
    • Item 3 – Legal Proceedings (Item 103 of Regulation S-K)
    • Item 4 – Submission of Matters to a Vote of Security Holders
  • Part II of Form 10-K
    • Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (Items 201, 701, and 703 of Regulation S-K)
    • Item 6 – Selected Financial Data (Item 301 of Regulation S-K)
    • Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 303 of Regulation S-K)
    • Item 7a – Quantitative and Qualitative Disclosures about Market Risk (Item 305 of Regulation S-K)
    • Item 8 – Financial Statements and Supplementary Data (Article 3 of Regulation S-X and Item 302 of Regulation S-K)
    • Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure (Item 304 of Regulation S-K)
    • Item 9A – Controls and Procedures (Items 307 & 308 of Regulation S-K)
    • Item 9A(T) – Controls and Procedures (Items 307 & 308T of Regulation S-K)
    • Commission Guidance for Management on Evaluating Internal Control over Financial Reporting
    • Item 9B – Other Information
  • Part III of Form 10-K
    • Item 10 – Directors, Executive Officers, and Corporate Governance (Items 401, 405, 406, and 407 (c)(3), (d)(4), and (d)(5) of Regulation S-K)
    • Item 11 – Executive Compensation (Items 402 and 407 (e)(4) and (e)(5) of Regulation S-K)
    • Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (Items 201(d) and 403 of Regulation S-K)
    • Item 13 – Certain Relationships and Related Transactions, and Director Independence (Items 404 and 407(a) of Regulation S-K)
    • Item 14 – Principal Accounting Fees and Services (Item 9(e) of Schedule 14A)
  • Part IV of Form 10-K
    • Item 15 – Exhibits and Financial Statement Schedules (Item 601 of Regulation S-K and Others)
  • Annual Report to Shareholders and the Summary Annual Report
    • Content of the Annual Report
    • Summary Annual Reports
  • Extensions and Exceptions
    • Late Filings
    • Omission of Data by Certain Wholly Owned Subsidiaries
  • Questions
• Chapter 5 - Registration Statements
  • Learning Objectives
  • Introduction
  • Registration Statement Forms
  • Information Required in a Registration Statement
    • Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges (Item 503 of Regulation S-K)
    • Use of Proceeds (Item 504 of Regulation S-K)
    • Dilution (Item 506 of Regulation S-K)
  • Securities Offering Reform
    • Communications about Registered Securities Offerings
    • Changes to the Registration Process
  • Smaller Reporting Company Regulatory Relief
    • Availability of Shelf Offerings to Smaller Reporting Companies: S-3 Changes
  • Exempt Offerings
    • Revisions to Form D
    • Revisions to Rule 144
    • Exemption of Compensatory Employee Stock Options from Registration under Section 12(g) of the Securities Exchange Act of 1934
  • Questions
• Chapter 6 - The Quarterly Report: Form 10-Q
  • Learning Objectives
  • Filing Requirements – Who, When, Where
    • Smaller Reporting Company Status
    • Transitioning between filing categories and reporting categories
  • The Content of Form 10-Q
    • New Check Box for XBRL Data
  • Part I – Financial Information
    • Item 1 – Financial Statements (Rule 10-01 of Regulation S-X)
    • Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 303(b) of Regulation S-K)
    • Item 3 – Quantitative and Qualitative Disclosures about Market Risk (Item 305 of Regulation S-K)
    • Item 4 – Controls and Procedures (Item 307 and 308(c) of Regulation S-K)
  • Part II – Other Information
    • Item 1 – Legal Proceedings (Item 103 of Regulation S-K)
    • Item 1A – Risk Factors
    • Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds (Items 701 and 703 of Regulation S-K)
    • Item 3 – Defaults on Senior Securities
    • Item 4 – Submission of Matters to a Vote of Security Holders
    • Item 5 – Other Information
    • Item 6 – Exhibits (Item 601 of Regulation S-K)
  • Omission of Information by Certain Wholly-Owned Subsidiaries
    • Signatures
    • Form 10-Q after an Initial Public Offering
  • Questions and Cases
    • Case Studies
• Chapter 7 - The Current Report: Form 8-K
  • Learning Objectives
  • Filing Requirements – Who, When, Where
  • Events to Be Reported
    • Section 1 – Registrant’s Business and Operations
    • Section 2 – Financial Information
    • Section 3 – Securities and Trading Markets
    • Section 4 – Matters Related to Accountants and Financial Statements
    • Section 5 – Corporate Governance and Management
    • Section 6 – Asset-Backed Securities
    • Section 7 – Regulation FD Disclosure
    • Section 8 – Other Events
    • Section 9 – Financial Statements and Exhibits
    • Safe Harbor; Eligibility to Use Form S-3 and to Rely on Rule 144
    • Other Matters Related to Form 8-K Filings and Conforming Amendments
  • Signatures
  • Questions and Cases
    • Case Studies – Acquiree Financial Statements in Form 8-K
• Chapter 8 - Proxy Statements
  • Learning Objectives
  • Introduction
  • Regulation 14A
    • Internet Availability of Proxy Materials
    • Electronic Shareholder Forums
  • Information to be Furnished to Security Holders
  • Information on the Nominating, Audit, and Compensation Committees
    • Nominating Committee Disclosures
    • Audit Committee Disclosures
    • Compensation Committee Disclosures
    • Executive and Director Compensation Disclosures
    • Board Meeting Disclosures
    • Shareholder Communications Disclosures
    • Disclosures Concerning the Independent Public Accountant
  • Proxy Statements – Voting on Equity Compensation Plans
  • Proxy Filing Requirements
  • Shareholder Proposals
  • Proxy Statements – Financial Information
    • Issuance or Modification of Securities
    • Mergers, Consolidations, Acquisitions, and Similar Matters
    • Financial Data
    • Summary Information
  • Tender Offers
  • Discussion Topics and Questions
• Chapter 9 - Reporting by Smaller Public Companies
  • Learning Objectives
  • History of Former Regulation S-B; Smaller Reporting Company Regulatory Relief Rules
  • Smaller Reporting Company Regulatory Relief Rules
    • Qualifying Standards for Treatment as “Smaller Reporting Company”
    • Financial Statement Requirements (Article 8 of Regulation S-X)
    • Electing Scaled Disclosure Standards on an “A La Carte” Basis
    • Designation on SEC Forms as “Smaller Reporting Company”
  • Small Business Compliance Guides
  • COSO Guidance for Smaller Public Companies
    • Control Environment
    • Risk Assessment
    • Information and Communication
    • Monitoring
  • Questions
• Chapter 10 - PCAOB Developments and PCAOB Guidance
  • Learning Objectives
  • 2008 PCAOB Rulemaking and Other Activity
    • Introduction
    • PCAOB Activities
  • PCAOB Auditing Standards (AS)
    • AS No. 1, References in Auditors’ Reports to the Standards of the PCAOB
    • AS No. 3, Audit Documentation
    • AS No. 4, Reporting on Whether a Previously Reported Material Weakness Continues to Exist
    • AS No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements
    • Final Rules: AS 5 Related
    • AS No. 6 – Evaluating Consistency of Financial Statements
    • Proposed Auditing Standards
  • PCAOB Requirements for Registered Accounting Firms
    • Registration and Reporting
    • Rule 3520 – The Fundamental Independence Requirement
    • Rule 3521 – Contingent Fees
    • Rule 3522 – Tax Transactions
    • Rule 3523 – Tax Services for Persons in Financial Oversight Capacity
    • Rule 3524 – The Auditor’s Responsibility in Connection with Audit Committee Pre-Approval of Services
    • Rule 3525 – Audit Committee Pre-approval of Non-Audit Services Related to Internal Control Over Financial Reporting
    • Rule 3526 – Independence
    • Inspections
    • Investigations and Adjudications
    • International
    • Funding
    • Rules for Annual and Special Reporting
    • Rules on Succeeding to the Registration Status of a Predecessor Firm
  • PCAOB Guidance
  • Report on the PCAOB’s 2004, 2005, 2006, and 2007 Inspections of Domestic Annually Inspected Firms
    • Description of Annually Inspected Firms
    • The Inspection Process
    • The Board’s Observations
    • Audit Deficiencies
    • Remediation of Quality Control Criticisms
  • Staff Views – An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements: Guidance for Auditors of Smaller Public Companies
  • PCAOB Staff Questions and Answers Ethics and Independence Rules Concerning Independence, Tax Services, and Contingent Fees
    • Rule 3522 – Tax Transactions
    • Rule 3523 – Tax Services for Persons in Financial Reporting Oversight Roles
  • Report on Auditor’s Implementation of PCAOB Standards Relating to Auditors’ Responsibilities with Respect to Fraud
    • Auditor’s Overall Approach to the Detection of Fraud
    • Brainstorming Sessions and Fraud-Related Inquiries
    • Auditor’s Response to Risk Factors
    • Financial Statement Misstatements
    • Risk of Management Override of Controls
  • Staff Audit Practice Alerts
    • Audit Considerations in the Current Economic Environment
    • Matters Related to Auditing Fair Value Measurements of Financial Instruments and the Use of Specialists
    • Guidance on Auditing the Fair Value of Share Options Granted to Employees
    • Matters Related to Timing and Accounting for Option Grants
  • Guidance on Auditing Adjustments to Prior-Period Financial Statements Audited by a Predecessor Auditor
  • The PCAOB’s Website
  • Questions
• Chapter 11 - Latest Developments
• Exhibits Exhibit A – Biodel Inc. Form S-1
• Exhibit B – Biodel Inc. Form 10-K
• Exhibit C – Biodel Inc. Form 10-Q
• Exhibit D – Biodel Inc. Form 8-K
• Exhibit E – Biodel Inc. Proxy Statement

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Chapter 1 - The SEC and the Laws It Administers

Learning Objectives

After completing this chapter you will

• Be familiar with the major securities laws.

• Be familiar with how the SEC is organized.

• Be familiar with the SEC's electronic filing system.

• Understand the relationship between the SEC and the accounting profession.

• Understand the SEC's requirement for reporting on internal control over financial reporting.

• Learn to use the SEC's website as a resource.

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, the SEC administers six other principal acts: the Public Utility Holding Company Act of 1935, 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 Securities and Exchange Commission (SEC or Commission) 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 below.

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 profitsharing 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 Commission 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 antifraud 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 Chapter 5.

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 held by at least 500 persons at year-end [Section 12(g)].

Companies that seek to have their securities listed and registered for public trading on an exchange must file a registration application with the exchange and a registration statement with the Commission. The over-the-counter bulletin-board (OTCBB) requires Exchange Act registration by any company, regardless of size, that wants its securities to be listed for trading. 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 objectives of these requirements are to

• 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 following section provides a list of the most commonly used Exchange Act reports.

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.

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