Grammyar tips

I love

■ Sarbanes Oxley;

■ financial reporting; and

■ revenue recognition.

■ Semi colon– Separates a list of bullets– Separates two or more long clauses

The Company vs We.■ “Us,” “Our,” and “we” or “the Company”

■ be consistent in MD&A and in the f-pages.

The Company vs We.

Defining terms

■ The at the market sales agreement (“ATM”) with Cantor Fitzgerald.– (“ATM”)– , or ATM,– (ATM)

■ Now instead of saying “Pizza Inn buffet restaurants” they can just say “Buffet Units”

Show a little respectively.

Writing out numbers

■ Spell out numbers that are ten or less, but write the actual number for numbers that are 11 or more.

Commas

■ When you are displaying a list of three or more items, the last comma is optional.

■ Internal control testing is cool because it’s fun, I like doing it, and it’s useful.

■ More common than not, the last comma is omitted.

■ Also add a comma between two separate clauses that both have a subject and a verb even if the subject is implied in a command.

■ The Company loves internal auditors because they add value, and the Company likes external auditors because they bring donuts on Fridays.

Accurate and typo free drafts give your SEC filings credibility■ There is a super nasty word in the

financial accounting world.– Restatement

■ Companies don’t restate due to typos

■ If you have minimal to no typos in your drafts

– your boss will have more confidence in you

– The external auditors will have more confidence in you

– Investors will have more confidence in you

– The SEC will have more confidence in you

Review question #1 (Required for CPE)Which of the following is a grammatical item that you should follow when preparing the 10Q/10K?

A. Use “We” and “the Company” interchangeably even in the same section.

B. Spell out numbers larger than 10.

C. Acronyms do NOT need to be defined.

D. Define acronyms the first time that they are used in a section.

Review question #1 (Required for CPE)Which of the following is a grammatical rule that you should follow when preparing the 10Q/10K?

A. Use “We” and “the Company” interchangeably even in the same section.

B. Spell out numbers larger than 10.

C. Acronyms do NOT need to be defined.

D. Define acronyms the first time that they are used in a section.

A. “We” and “the Company” must be used consistently in a particular section, and cannot both be used within the same section. (Incorrect)

B. The financial statement preparer should spell out numbers that are ten or less. (Incorrect)

C. Acronyms need to be defined the first time that they appear in a section. (Incorrect)

D. Acronyms need to be defined the first time that they appear in a section. (Correct)

Handwritten Comments

Review question #2 (Required for CPE)(Fill in the blank.) When updating your document with handwritten comments, the term “stet” means ________ .

A. Insert a capital letter here.

B. Disregard this edit.

C. Add a paragraph break.

D. Remove this word.

Review question #2 (Required for CPE)(Fill in the blank.) When updating your document with handwritten comments, the term “stet” means ________ .

A. Insert a capital letter here.

B. Disregard this edit.

C. Add a paragraph break.

D. Remove this word.

A. A capital letter comment will be either with two arrow points above the lower-case letter, or with the capital letter written over top of the lower case letter. (Incorrect)

B. When a review marks an edit, but then changes his/her mind and believes the edit is unnecessary, he/she will attach the term “stet” to the original edit, which means to disregard the original edit. (Correct)

C. A page break addition mark is generally with a backwards “P” or the words “new paragraph” inserted. (Incorrect)

D. A “remove this word” edit is annotated with a line, ending in a small loop, through the word to be removed. (Incorrect)

Internal – Immediate Supervisor

■ Needs a second set of eyes on the whole document including reviewing all tie outs of all numbers

Outside of accounting but internal to the Company■ Internal legal counsel

■ Sales and marketing head

■ Research and Development Group

■ Regulatory Group

Certifications and Sub-certifications

■ The CEO and CFO are personally liable

■ Other key executives often will sign a sub-certification

Board of Directors

Board of directors

Audit CommitteeGovernance and

Management Resources Committee

Investment Review Committee

Nominating Committee

Strategic Initiatives Committee

Compensation Committee

Review question #3 (Required for CPE)(Fill in the blank.) The purpose of a sub-certification statement is to ________.A. Provide absolute protection to the

CFO from errors made by the other executives.

B. To provide additional confidence to the CFO and CEO that the other executives have disclosed all material information to the CFO and CEO.

C. Satisfy SEC requirements that all companies must have a sub-certification process.

D. Provide tie out support for the statement of operations.

Review question #3 (Required for CPE)(Fill in the blank.) The purpose of a sub-certification statement is to ________.A. Provide absolute protection to the

CFO from errors made by the other executives.

B. To provide additional confidence to the CFO and CEO that the other executives have disclosed all material information to the CFO and CEO.

C. Satisfy SEC requirements that all companies must have a sub-certification process.

D. Provide tie out support for the statement of operations.

A. While the sub-certifications can provide some limited protection to the CFO, they do not provide absolute protection. (Incorrect)

B. Generally, the CFO and CEO can gain additional confidence that the other executives have disclosed to them any significant issues that would require financial statement disclosure. (Correct)

C. While the SEC requires certification statements from the CEO and CFO, the SEC does NOT require sub-certification statements from the other executives. (Incorrect)

D. The sub-certifications do not contain any tie out support that can be used in preparation of the 10Q/10K. (Incorrect)

External - Auditors

■ Review vs. Audit

■ Big Four vs. Second Tier– Cost savings– Optics

External - Auditors

■ Complex accounting issues– Be proactive– Own your positions– Issues that just pop-up during

the audit

■ Financial statement disclosure

External – Outside Counsel

■ Some of the top SEC lawfirms are as follows– Latham & Watkins, – Cooley, – Skadden, Arps, Slate, Meagher & Flom– Davis Wright Tremaine– Wilson, Sonsini, Goodrich & Rosati

■ The industry is highly fragmented with excellent boutique firms.

External - SEC Counsel

■ SEC Law questions

■ Risk factors

■ Exhibits

■ Other oddball filings (8-K, section 16)

Edgarization and XBRL Tagging

Finalizing and Filing

Review question #4 (Required for CPE)All of the following companies offer 10Q/10K edgarization support services EXCEPT for which of the following.

A. QuickBooks

B. Workiva

C. Donnelley Financial Services

D. RDG Filings

Review question #4 (Required for CPE)All of the following companies offer 10Q/10K edgarization support services EXCEPT for which of the following.

A. QuickBooks

B. Workiva

C. Donnelley Financial Services

D. RDG Filings

A. QuickBooks does not offer this service. (Correct)

B. Workiva is the market leader in providing edgarization services. (Incorrect)

C. Donnelley Financial Services provides edgarization services. (Incorrect)

D. RDG Filings provides edgarizationservices. (Incorrect)

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