In our SEC Reporting Skills Workshop we always mention the importance of getting details right in your periodic and current reports.\u00a0 Little picky mistakes could give an experienced reader a negative impression of your overall reporting.<\/p>\n
One simple example of such a detail is the Form 10-K cover page check-box S-K Item 405 disclosures about Section 16 reporting by insiders.\u00a0 It is surprising how many companies don\u2019t get this check box right.\u00a0The box should be checked if all Section 16 people filed all their required reports on a timely basis<\/strong>.\u00a0 A knowledgeable reader, when they see a mistake with this cover page item, may ask \u201cwhat else did this company not get right?\u201d\u00a0 (As a side note, thank goodness this confusion may finally be eliminated if this part of the FAST Act Modernization and Simplification of Regulation S-K proposal is made final!\u00a0\u00a0 You can check out page 33 in this proposed rule release<\/a>.)<\/p>\n In the world of SEC reporting we all get to learn as we make mistakes and also from the mistakes of others.\u00a0Here is a kind of unfortunate example of a company that made a mistake in one of the pickier parts of a filing, the certifications, and then missed a detail in the follow-up.<\/p>\n S-K Item 601, paragraph 31, which sets out the form of the certifications, contains this language:<\/p>\n (31)(i)\u00a0Rule 13a-14(a)\/15d-14(a) Certifications.<\/em>\u00a0The certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) (17 CFR 240.15d-14(a)) exactly as set forth below:<\/u><\/strong><\/p>\n Certifications*<\/em>\u00a0I, [identify the certifying individual], certify that:<\/p>\n Well, as you can see on Exhibit 31<\/a>of this Form 10-K<\/a>, this company made a simple mistake.\u00a0 They forgot to update the language in the certification, unfortunately referring to a Form 10-Q rather than Form 10-K.\u00a0 OK, these kinds of things happen to all of us, and this situation is at least easy to fix.\u00a0 It would appear, from the order of the company\u2019s filings, that they found the mistake on their own, and filed this amendment<\/a>.<\/p>\n Unfortunately, the company forgot to check one of the sources of guidance we emphasize in our workshops, the CorpFin Compliance and Disclosure Interpretations<\/a>.\u00a0 This is the relevant C&DI, which is included in the S-K Item 601 Exhibits section of the C&DI\u2019s:<\/p>\n 246.14<\/strong>\u00a0The following errors in a certification required by Item 601(b)(31) are examples of errors that will require the company to file a corrected certification that is accompanied by the entire periodic report: (1) the company identifies the wrong periodic report in paragraph 1 of the certification; (2) the certification omits a conformed signature above the signature line at the end of the certification; (3) the certification fails to include a date; and (4) the individuals who sign the certification are neither the company’s principal executive officer nor the principal financial officer, or persons performing equivalent functions. [July 3, 2008]<\/p>\n That lead to the company getting this comment from the SEC:<\/p>\n Amendment No. 1 to Form 10-K for the Fiscal Year Ended December 29, 2017<\/strong><\/p>\n It is always a bit embarrassing to have to amend an amendment.\u00a0 And, this is a great reminder that when you are dealing with issues that are not part of your regular reporting process to always check all the sources of guidance from the SEC.\u00a0The C&DI\u2019s in particular deal with a huge variety of process questions, disclosures and tactical issues and are always a good resource to check.<\/strong><\/p>\n As a PS, the company did get the Section 16 box right!\u00a0 The box is checked, and their proxy indicates that to the best of the company\u2019s knowledge everyone filed all required reports on time.<\/p>\n As always, your thoughts and comments are welcome!<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" In our SEC Reporting Skills Workshop we always mention the importance of getting details right in your periodic and current reports.\u00a0 Little picky mistakes could give an experienced reader a negative impression of your overall reporting. One simple example of such a detail is the Form 10-K cover page check-box S-K Item 405 disclosures about … Continue reading June 2018 Quarter End Post One – A Picky Reminder \u2013 Attention to Detail and the Compliance and Disclosure Interpretations<\/span> \n
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