Questions:
Foreign Corrupt Practices Act (FCPA)
Go to the SEC website and find the October 2011 "Investor Bulletin: The Foreign Corrupt Practices Act - Prohibition of the Payment of Bribes to Foreign Officials." Provide brief answers to the following questions:
1. What is the primary purpose of the anti-bribery provisions of the FCPA?
2. It says, "The FCPA does not apply to any "facilitating or expediting payment," the purpose of which is to expedite or secure the performance of a "routine governmental action." What is meant by "routine governmental action?"
3. What are the two accounting requirements?
Some common filings with the SEC
Go to the website for Mead Johnson Nutrition Company and find the SEC filings:
• Form 10-K for the year ending December 31, 2014
• Form 10-Q for the quarter ending June 30, 2015
• Proxy Statement (Regulation 14A) filed February 3, 2014
• Form 8-K filed July 28, 2015 (There are two 8-K's filed on this date)
Based on these forms, provide brief answers to the following questions (If not stated, state "N/A"):
4. What is the purpose of the Management's Discussion and Analysis section of the Form 10-K? Name two things you learned about the company that could have a material impact on earnings.
5. Briefly describe the FCPA investigation as disclosed in the Form 10-K and Form 10-Q.
6. What financial statements were included in the Form 10-Q? If certain financial statements were not included, briefly describe what significant changes were disclosed instead? Was the Form 10-Q information audited and how did you determine this?
7. What type of information was included in the proxy statement (Regulation 14A) that was not disclosed in the Form 10-K?
8. Briefly describe the significant event(s) that were disclosed in the Form 8-K filed with the SEC.
Sarbanes-Oxley Act of 2002
9. What statements signed by the CEO and CFO were included with the Company's annual and interim financial reporting? Briefly describe the purpose of these statements.
10. Under Section 404, what was the role of management vs. the independent auditors in filing an internal control report? Where do you see these reports for the Company?
International Accounting Standards
Go to the SEC website and read the Executive Summary (pages 1 - 6) of the "Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers---Final Staff Report---July 13, 2012."
11. What is the purpose of this document?
12. Briefly describe one of the observations made by the Staff that you believe is worth noting.
For the following two questions, go to the SEC website and read "Remarks at the 32nd Annual SEC and Financial Reporting Institute Conference" by Paul Beswick, Chief Accountant, Office of the Chief Accountant, U.S. Securities and Exchange Commission, May 30, 2013.
13. Briefly describe why the U.S. needs a strong IASB and what is being done about it.
14. How does Paul Beswick define a successful implementation of an accounting standard?
For background purposes, the following three Journal of Accountancy articles may be helpful:
"Still in flux: Future of IFRS in U.S. remains unclear after SEC report," September 2012
"New mechanisms eyed by FASB, IASB in long march toward global comparability," January 10, 2013
"Beswick: "Change fatigue" a barrier to IFRS in U.S.," May 2, 2013.
For the following question, go to the SEC website and read "Speech by James Schnurr, Chief Accountant before the 2015 Baruch College Financial Reporting Conference." May 7, 2015.
https://www.sec.gov/news/speech/schnurr-remarks-before-the-2015-baruch-college-financial-reporti.html
15. Briefly describe the current thinking with respect to convergence and IFRS.