Public Co, SEC & Audit

The language of public companies: SEC filings like the 10-K and 8-K, the external audit and SOX internal controls, materiality, goodwill, and going public through an IPO.

Key terms & definitions

25 terms in this pack

AUDIT

Independent examination that tests your support and controls

AUDITOR

Independent firm that signs an opinion on the financials

CONTROLS

Internal ___, the checks SOX requires you to test

DILIGENCE

Due ___: the investigation done before a deal closes

DILUTION

Drop in ownership percent when new shares are issued

DISCLOSURE

A note giving investors material information

EDGAR

The SEC's online database of company filings

EIGHTK

SEC filing announcing a material event (8-K)

FILING

An SEC submission such as a 10-K or 8-K

FOOTNOTE

Disclosure detail at the back of the statements

GOODWILL

Premium paid over the fair value of net assets acquired

IFRS

International accounting standards, GAAP's global cousin (acronym)

INSIDER

___ trading: illegal use of material nonpublic info

INTANGIBLE

An asset without physical form, like a patent

IPO

A private company's debut on the public market (acronym)

MATERIAL

___ weakness: a serious internal-control deficiency

OPINION

What the auditor issues: unqualified, qualified, or adverse

PCAOB

Board that oversees auditors of public companies (acronym)

PROSPECTUS

Document offering securities to prospective investors

RESTATEMENT

Reissuing prior financials to correct an error

SAMPLE

What an auditor pulls to test a population of transactions

SEC

U.S. regulator of public-company disclosure (acronym)

SOX

Sarbanes-Oxley, the post-Enron internal-controls law (acronym)

TENK

The annual report a public company files with the SEC (10-K)

TICKER

A public stock's short trading symbol