Question

The SEC Requirement especially for publicly-listed firms is to file their Form 10K with the SEC within 75 days after the end of the financial year. Let’s assume A Company for various reasons is unable to meet this Requirement one year, including the fact that the audit performed by the auditors is also not completed. In fact, the delay is such that the first quarter ends during this delay, and now the Company is facing the Requirement to prepare and file their interim financial statements for the new fiscal year that just started.

From an accounting information systems point of view, what are your thoughts of how to deal with this situation, especially the fact that the closing of the books for the first quarter is now upon us, including the preparation of a complete set of financial statements for the first quarter? Make sure that you provide an overall solution or a recommended solution for this situation in your response.

Answer 1

The recommened solution to handle such a situation shall be to form two teams within the Financial Reporting Department to address the issues of Preparation of Annual as well as Current Quarter Financial Statements.

The task of team 1. shall be to get the Audit Work completed and prepare the Annual Financial Statements. Upon completion, it should immediately File Form 10K as per the requirements.

The task of team 2 shall be to get the Quarterly Results prepared and get them approved from the Management for the purpose of uploading the same.

Both the teams shall be under the control of Accounts Head with sub heads being appointed to complete the given task. They should be accountable and responsible for selectio of the team Members and assigning the work duties to them.

Accounts Head shall monitor the overall progress and report to the CFO or Board.