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MARSHALL, Mich., March 1, 2004.—A newsletter serving the $5.4 billion
annual report industry calls the U.S.' Securities and Exchange Commission
"confused," corporate chieftains "recalcitrant by nature."
Sid Cato has edited, and published, his Newsletter on Annual Reports monthly since September 1983. In his March 2004 issue—No. 247—he discusses a mid- February SEC broadside, which Cato says "demands improvement in disclosure involving Management's Discussion & Analysis of Operations (MD&A) in a company's 10-K filing." "What's that got to do with annual reports?" questions Cato. The MD&A, he said, is but a part of the legalistic Form 10-K, a required-by-government ("at least for U.S. corporations") regulatory filing, "not intended for the general public." The public, he says, "warrants and deserves" the "traditional annual report," which reads like a consumer publication—"which is what it is—or should be, at least." He blames the SEC for confusing everyone. "To the SEC, an annual report is the 10-K, never," he maintains, "intended for public consumption." He said "increasing numbers of companies" are making the 10-K major portion of their annuals and, "like as not, failing to identify the stockholder-oriented document as abbreviated." |