Management Discussion and Analysis, typically referred to as MD&A, is the portion of a public company's annual report (or quarterly filing) where management addresses the company’s performance. It is intended to be a narrative explanation of the financial statements and statistical data the Registrant believes will enhance a readers' understanding of its financial condition along with results of operation. Management discussion and analysis is one of many sections required by the SEC and the Financial Accounting Standards Board (FASB) to be included in a public company’s annual report to shareholders. The SEC has repeatedly stated, MD&A is the "heart and soul" of a company's disclosure requirements under the Securities Exchange Act of 1934. It is a crucial component in increasing the transparency of a company's financial performance and providing investors with the ability to evaluate the company on an informed basis.
On January 30, 2020 the SEC proposed amendments to eliminate certain duplicative disclosures and enhance disclosures in the Management's Discussion and Analysis of Financial Condition and Results of Operations section ("MD&A") for the financial statements. They also proposed parallel amendments applicable to financial disclosures provided by foreign private issuers. This chapter will provide an overview of important concepts and updates related to Management’s Discussion and Analysis of Financial Position and Results of Operation s (MD&A) as outlined in Topic 9 of the Financial reporting Manual.
The SEC has been continually reviewing the disclosure requirements to improve issuer disclosures of material information while allowing investors to make better capital allocation decisions while reducing compliance burdens and costs.
The Commissions purpose for goals in adopting integrated disclosures were to revise or eliminate overlapping or unnecessary disclosure requirements wherever possible. This in turn would reduce burdens on Registrants and enhance readability without affecting the provision of material information to investors. This course will evaluate the various amendments covered under the SEC’s changes to MD&A for public companies.
Publication Date: June 2020
Designed For
CFO’s and CEO’s, Board of Directors, Public Accounting Auditors, Finance and Accounting Professionals, and Compliance Professionals.
Topics Covered
- MD&A Objectives and Purpose
- Disclosure Components
- Updates to MD&A
- MD&A Pain Points
- KPI's
Learning Objectives
- Identify the purpose and objectives of MD&A
- Recognize the typical components included in MD&A
- Identify the updated objective of MD&A disclosures
- Describe how to examine details of final amendments
- Describe how to examine criteria related to Key Performance Indicators
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Auditing (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Lynn Fountain
Lynn Fountain has over 38 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She is a highly sought-after trainer and international speaker. In addition, Ms. Fountain has assisted numerous companies with enterprise risk management frameworks, internal audit processes and financial accounting. She also serves as a discussion leader for the AICPA for numerous classes finance, accounting and risk management topics.
Ms. Fountain is the author of three separate technical books. Her first book released in 2015 by the Institute of Internal Auditors Foundation is entitled “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”. Her second book “Leading the Internal Audit Function” was released in October 2015 by Taylor & Francis Publications. This book serves as the initial launch for a series of leading practice internal audit and information technology publications. Her third book “Ethics and the Internal Auditor’s Dilemma” was released in December 2016.
Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.