MD&A Report Card


ON THE RECORD

What is the state of MD&A disclosure? The staff in the SEC’s Division of Corporation Finance reviewed over 6,000 public companies’ filings last year. They tell me that generally, MD&A has improved. In many instances companies are better explaining their financial statements, providing and clarifying context and using MD&A to fill in some of those gaps in GAAP.

Despite this progress, there is still room for improvement. Some companies are doing an ‘elevator analysis’ without ample explanation. And some companies’ MD&A is still unnecessarily lengthy and not focused on telling the story clearly.

Management’s story would be more complete if it contained more forward-looking information, better explained trends and uncertainties that affect the business and discussed in more detail the business’ key drivers.

—SEC Commissioner Cynthia A. Glassman,
remarks at the 10th Annual Corporate Counsel Institute,
Washington, D.C., March 2006.

Where to find January’s flipbook issue

Starting this month, all Association magazines — the Journal of Accountancy, The Tax Adviser, and FM magazine (coming in February) — are completely digital. Read more about the change and get tips on how to access the new flipbook digital issues.

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