Academic journal article Journal of Accountancy

MD&A Reporting Tips

Academic journal article Journal of Accountancy

MD&A Reporting Tips

Article excerpt

Deciding what to include in the management discussion and analysis (MD&A) section of a financial report isn't always easy During a session at the AICPA Conference on Current SEC and PCAOB Developments, Katherine Gill-Charest, CPA, the chief accounting officer at Viacom, and Brian Lane, a corporate securities lawyer at Gibson, Dunn & Crutcher, offered tips on crafting an effective and compliant report.

[check] Use plain language, and keep the overview brief. Good MD&A reports minimize jargon and provide plenty of tables. "Assume that one of your directors is Rip Van Winkle and they woke up at the end of the quarter," Lane said. "And they're like, 'Hey, I just woke up. How did it go?' That's the overview. OK, sales are up 8%, and here's why."

[check] Give a top-down analysis. Focus on the most important items first, and save the minutiae for the bottom of the report--if you include it at all. And remember: Projections are not required. "You do have to talk about known uncertainties and how they could impact the future," Lane said. "But you don't have to make projections."

[check] Pay attention to what your competitors and peers are disclosing. The SEC is going to look at them. "They are going to look at you in that same lens," Lane said. "So you can anticipate comments by looking at your peers."

[check] Answer the most important question: "Why?" "There's the 'who,' 'what,' 'where,' and 'when,' but then there's the 'why,'" Lane said. "And that's really what MD&A is about."

[check] Make risk factors less boilerplate. It's a mistake to include the same risk factors in the same order with the same explanation year after year, Lane said.

[check] Quantify and describe effects of multiple factors. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.