Annual Reports Key Terms

Avoid federal penalties by understanding annual reports key terms and meeting annual reporting requirements

An annual report is a mandatory document the government requires of all public companies. In essence, an annual report is a culmination of business figures for the year past, including financial results, competitive accomplishments and board member information. Annual reports are sent to shareholders, the public and the government.

The requirements of annual reporting are specific. To avoid any penalties associated to failing to comply, it is necessary to become savvy in this area of reporting. By learning annual reports key terms, you can rest assured that you have fulfilled your obligations as a business owner.

Security and Exchange Commission (SEC)

A federal agency that regulates annual reporting to ensure full disclosure for the protection of company shareholders. The SEC can penalize any company that doesn't comply with its requirements.
Security and Exchange Commission further explains the laws that define its role in regulating the communication requirements for business financials and operations.

Annual reporting requirements

Refers to the data that is expected in any annual report. It is common to offer information above and beyond the requirements as specified by the SEC.

EDGAR, or the Electronic Data Gathering, Analysis, and Retrieval system

An electronic system was implemented to help companies set up and submit the required financial and operations information. The objective of this tool is to support a fair reporting method that offers all the necessary information to satisfy shareholders, the public and the government.

Shareholders

People who own shares of a company and are, as such, the collective owners of a company. Shareholders have certain voting and decision making rights within the corporate structure.

Cash Flow Statement (CFS)

An explanation of how money comes into a company and how it is being spent. The CFS is one of the requirements of an annual report.

Balance Sheet

Data that reflects fluctuations in a company's financial worth. Outside auditors must be commissioned to review this information.

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