Module Assignment Guidelines
Overview: In this assignment, you will learn to search for and analyze the qualitative/nonfinancial data within a public company's annual report. You will examine the footnotes as well as management discussions to identify elements that could suggest the possibility of fraud. It is important to know how to analyze qualitative/nonfinancial data, as indicators of fraud can be found within this data.
Prompt: Using the SEC's EDGAR database, search for a large public company and download the most recent Form 10-K. This form contains all the information that must be reported annually to the SEC. Within this form, ensure that it includes footnotes, the management discussion and analysis (MD&A) sections, review each of the previously listed sections, and discuss any off-balance sheet financing, management concerns, management's expectations for the future, and anything interesting or out of the ordinary. Feel free to supplement your search with current articles that discuss your chosen company and the industry in which it operates.
Specifically the following critical elements must be addressed:
I. Company Selection: Select and name the public company along with the fiscal year-end of the annual report that includes footnotes and the management discussion and analysis (MD&A) sections.
II. Footnotes: Review the footnotes of the financial statements and describe off-balance sheet financing in general or with specific examples provided within the Form 10-K of the selected company (e.g., operating lease or through special purpose entities).
III. Management Discussion and Analysis (MD&A): Review the MD&A of the annual report. Management often discusses issues of concern in this area of their report. They also include projected financial statements, which may suggest ideas about the firm's potential for future earnings.
a. Describe any management concerns listed and/or explain anything you find interesting or out of the ordinary.
b. Describe any projections and/or future expectations of the management.
Guidelines for Submission: Your paper should be submitted as a 2- to 3-page Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and at least two sources cited in APA format.