Accounting All-in-One For Dummies by Kenneth Boyd

Author:Kenneth Boyd
Language: eng
Format: epub
ISBN: 9781118813652
Publisher: Wiley
Published: 2014-02-05T02:22:16+00:00

Book IX, Chapter 1 displays a standard unqualified audit opinion. That report gives you some idea of the language used.

Part III: Identifying management and corporate governance

Yippee! You've successfully navigated the more detailed parts of Form 10-K. Heading toward the finish line, next up is a discussion of management and governance. In this short section, the company lists its directors and executive officers — most likely with a reference back to Part I of Form 10-K (if that section has already provided sufficient information).

For example, Part III may read as follows: “See Item X in Part I of this report for information regarding executive officers of the corporation.” Otherwise, the company lists here each individual's name, title/office, and any other relevant information (such as whether the individual is associated with another unrelated organization).

Now, what about corporate governance? Some of the issues corporate governance addresses are ethical business behavior, responsibility for the community in which the company operates, and equitable treatment of the shareholders. For example, corporate governance demands full and fair disclosure associated with the financial statements so investors can make informed decisions. For a manufacturing company, this section may note that it takes care not to pollute the drinking water of adjacent cities with illegal dumping of factory runoff.

Most companies state that they have a Code of Business Conduct for both employee and nonemployee directors. If the code isn't included in Form 10-K, the form will at least provide information as to where on the company website this information resides. See Chapter 4 for more about corporate governance.

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