Using The Library And The Internet: Identify A Publicly Held

Using The Library And The Internet Identify A Publically Held Multina

Using the Library and the Internet, identify a publicly held multinational company of your choice. Research its filings to the SEC, particularly the 10-K and 10-Qs. Also, examine its annual report online. You will then prepare an APA research paper including the following elements: What assumptions is the financial reporting model based on? What principles support the financial reporting model? Who oversees the accounting profession? What is the role of Congress in settling concerns that arise with accounting firms and their clients? Describe how the annual report differs from the 10-K. What is contained in the annual report that is not in the 10-K and vice versa? How does the 10-K report differ in content from the 10-Q? What is the reason for the difference? Describe two disclosures in the 10-K that were surprising or interesting to you, and explain why.

Submitting your assignment in APA format requires a title page with running head and title, an abstract summarizing your paper, a body of 3–4 pages, and a reference page. The body should be double-spaced, written in third-person, with 12-point Times New Roman or Courier font, and free of color, bold, or italics except for APA headings. In-text citations and references must be in APA style and correspond to credible academic sources.

Paper For Above instruction

Introduction

The financial reporting system plays a crucial role in ensuring transparency, accuracy, and accountability in the corporate world. It is governed by a set of assumptions and principles designed to provide stakeholders with reliable financial information. This paper explores the foundational assumptions and supporting principles of the financial reporting model, examines the oversight of the accounting profession, compares the annual report with the 10-K, and analyzes notable disclosures from a publicly held multinational company chosen for this research.

Assumptions and Principles of the Financial Reporting Model

The financial reporting model is grounded in several key assumptions that facilitate the preparation of financial statements. These include the economic entity assumption, which posits that a company’s activities can be separated from those of its owners and other entities; the going concern assumption, presuming that the company will continue to operate unless there is evidence to the contrary; the monetary unit assumption, which assumes that financial transactions can be measured and expressed in monetary terms; and the periodicity assumption, which divides the company’s life into time periods for reporting purposes (FASB, 2010).

Supporting these assumptions are foundational principles such as relevance, faithful representation, comparability, verifiability, timeliness, and understandability. These principles ensure that financial information is useful for decision-making, accurately reflects economic reality, and is comparable across periods and entities (Wolk, Borden, & edir, 2018).

Oversight of the Accounting Profession and Congressional Role

The accounting profession is overseen primarily by the Financial Accounting Standards Board (FASB), which establishes accounting standards in the United States. Additionally, the Securities and Exchange Commission (SEC) has regulatory authority over publicly traded companies and their accounting practices (SEC, 2022). Congress plays a vital role in shaping the regulatory environment, enacting laws such as the Sarbanes-Oxley Act of 2002, which aims to enhance corporate accountability and prevent financial scandals. Congress also oversees the activities of the Public Company Accounting Oversight Board (PCAOB), which regulates auditing firms and enforces compliance with standards (PCAOB, 2023).

Differences Between the Annual Report, 10-K, and 10-Q

The annual report is a comprehensive document sent to shareholders, providing an overview of the company’s financial health, operations, and future strategies, often accompanied by the CEO’s letter and sustainability disclosures. The 10-K, mandated by the SEC, is a detailed, legally required financial filing that includes audited financial statements, management’s discussion, risk factors, and internal controls. Conversely, the 10-Q is a quarterly report that provides unaudited financial data, a condensed version of the 10-K, and is less comprehensive (SEC, 2022).

The annual report often contains qualitative information such as corporate social responsibility initiatives, future outlooks, and detailed narrative sections absent from the 10-K. Meanwhile, the 10-K provides in-depth financial data, audited figures, and forms the basis for regulatory compliance. The 10-Q differs from the 10-K primarily in scope and detail; it offers timely updates but lacks the extensive narrative and audited financial statements of the 10-K.

The reasons for these differences stem from regulatory requirements, the need for timely disclosure, and the varying purposes of investor communication. The 10-Q’s focus on quarterly updates facilitates rapid transparency, whereas the 10-K aims for comprehensive annual accuracy and accountability.

Notable Disclosures in the 10-K

During my analysis of the selected multinational company’s 10-K, two disclosures stood out. The first was the detailed risk factor regarding international currency fluctuations. This was surprising because it highlighted the significant exposure the company faces beyond domestic markets, emphasizing the interconnectedness of global financial systems.

The second noteworthy disclosure related to climate change risks and sustainability initiatives. It was interesting because it illustrated the company’s proactive approach to environmental, social, and governance (ESG) factors—reflecting a shift in corporate transparency and stakeholder concern for sustainable practices (KPMG, 2021). Such disclosures offer insight into the company’s strategic planning and risk management beyond traditional financial figures.

Conclusion

The financial reporting system in the United States is underpinned by well-established assumptions and principles that ensure transparency and reliability. Oversight by regulatory bodies like the SEC and FASB, along with legislative actions by Congress, helps maintain the integrity of financial reporting. Understanding the distinctions between the annual report, the 10-K, and the 10-Q highlights the layered approach to corporate transparency—each serving distinct informational purposes. Analyzing specific disclosures reveals the evolving landscape of corporate transparency, particularly concerning risk management and sustainability, which are increasingly integral to investor decision-making.

References

FASB. (2010). Statement of Financial Accounting Concepts No. 8: Conceptual Framework for Financial Reporting. Financial Accounting Standards Board.

KPMG. (2021). Corporate sustainability reporting: Trends and disclosures. KPMG International.

PCAOB. (2023). About the Public Company Accounting Oversight Board. https://pcaobus.org/about

SEC. (2022). SEC filings and disclosures. Securities and Exchange Commission. https://sec.gov

Wolk, H., Borden, N., & edir, R. (2018). Financial accounting: IFRS Edition. McGraw-Hill Education.