Reading SEC comment letter correspondence

The objective of this assignment is to introduce you to researching accounting issues that were the subject of SEC comment letters.  Reading SEC comment letter correspondence is a common practice among companies for benchmarking purposes, as described in Chapter 3 of the Collins text.  It relates to step 1 of the research process to help you gain an understanding of certain accounting issues and their background.  Comment letter correspondence may be used as non-authoritative guidance as outlined in Chapter 5.  Finally, in this assignment, you will practice citing the Accounting Standards Codification (ASC) - see Chapter 4 for guidance on effective documentation.

Go to the SEC website and search for a comment letter case involving an accounting issue of your choice.  You can use the EDGAR full-text search tool at https://searchwww.sec.gov/EDGARFSClient/jsp/EDGAR_MainAccess.jsp.  The form type for SEC comment letters is “UPLOAD” and the form type for company response letters is “CORRESP”.

Note that each comment letter case may go through multiple rounds of comment letters from the SEC and ensuing response letters from the company until it is resolved.  Ensure that you start reading the SEC comment letter that initiated the case (the subsequent letters reference a previous comment letter or response).  Note also, that each set of comment letter correspondence may focus on multiple accounting issues.  Just choose one that you think is interesting (you will have to explain why it is interesting later).  You will submit a memo summarizing the comment letter case and answering the detailed questions below.

You may discuss any aspect of this assignment with your peers, but each student must choose his/ her own comment letter case and submit his/ her own memo answering all the questions.  Upload your memo via SafeAssign in BlackBoard prior to the next class on September 13th.
______________________________________________________________________________

Required
Use your own words as far as possible to avoid plagiarism issues and answer the following questions.  General memo format may be used, but don’t worry too much about the format, just be clear.  There is no minimum length requirement, so make it as concise as possible while fully addressing each question.  Be thorough.  Think critically and don’t be shy about sharing your opinion.
1. Please list the following information at the top of your memo:
a. The name of the company that received an SEC comment letter.
b. The company’s central index key (CIK).  This number is found on the company’s main EDGAR page.  For example, PulteGroup’s CIK is 0000822416.
c. The date of the original SEC comment letter containing the issue of interest.
d. The dates of any subsequent SEC comment letters related to the issue.
e. The dates of all company response letters.

2. What is the accounting issue you found, and why did you find it to be interesting?  In other words, what about the issue was novel or subjective?

3. How did the SEC staff identify the accounting issue?  Note this will require you to read the section of the original disclosure filing (e.g. 10-K, S-1, etc.) that the SEC staff cites in its initial comment letter to the company under review.  Examples of triggers for comments could be unclear disclosures, complex transactions, or questionable accounting practices (estimates, assumptions, etc.).

4. How was the comment letter case resolved?  The company may have satisfied the SEC by providing additional information to justify their accounting, they may have committed to additional disclosure in a future filing, or they may have amended the disclosure filing being reviewed, which may have included a restatement to the financial statements.

5. Out of the all the accounting guidance cited in the comment letter correspondence, what do you think was the key to resolving the issue, and how was it applied to this case?  Practice citing the Accounting Standards Codification (ASC) - see Chapter 4 of the Collins text for guidance on effective documentation.

6. Do you agree with the resolution of the issue or do you think a different accounting position could be supported?  Provide the basis for your conclusion.

To get this or a similar paper done by an expert writer at EssaySharkWriters.Com, Click here