Eight George Washington University School of Business graduate students will research the financial disclosure statements of nearly 50 Fortune 500 companies this summer through the Initiative on Rethinking Financial Disclosure, a partnership between the university’s Institute for Corporate Responsibility (ICR) and the Center for Audit Quality (CAQ).
The students will examine the Securities and Exchange Commission’s Form 10-K, the annual public financial reporting statement used by corporations, and prepare a comprehensive report of recommendations to improve the 10-K. These recommendations will be presented to the SEC in October.
“This is a tremendous opportunity for our students to develop solutions to a significant business challenge facing investors, markets and policymakers,” ICR Senior Research Scholar Cynthia Glassman said.
Rayan Chahwan, Liyuan Su, Liz Halford, Han Zhang, Elizabeth Moehlenbrock, Chu Xu, Christopher Haddad and Chang Hyun Song, students in the Master of Business Administration, Master of Science in Finance and Master of Accountancy programs, were nominated and selected for the research team.
The students will examine the 2013 filings of randomly selected companies and explore possible modifications to the 10-K disclosure requirements that address the relevance of the information provided and how easy it is to read and understand the filings.
“The students will ask, ‘Am I receiving pertinent information in a concise, transparent way?’ Additionally, they will analyze how the SEC and companies can take advantage of modern technology to make the information more accessible, readable and user-friendly,” GWSB Associate Professor of Accountancy Susan Kulp said.
The ICR/CAQ initiative was launched earlier this month in response to the speech given by SEC Chair Mary Jo White at the National Association of Corporate Directors in October 2013 that called for the 10-K to be streamlined so that it is more useful for investors searching for financial information.
Associate Director of the ICR John Forrer said that the students will look at the reports from an investor perspective and work toward making them more clear, concise and comprehensive.
“This is the type of project that we excel in as a university located in Washington,” Dr. Forrer said. “The initiative takes an important business issue, examines that issue in the context of public policy and uses the expertise of our students and faculty to make real recommendations for change. This is just the kind of project that makes GW truly unique. ”
The research team will receive guidance from an advisory committee of experts chaired by Dr. Glassman, a former SEC commissioner, and CAQ Executive Director Cindy Fornelli.
“Effective disclosure is a key component of world-class capital markets,” Ms. Fornelli said. “These students, working with an expert advisory committee, will have the chance to make a positive contribution to this important public policy dialogue.”
The students will complete their research in July and present their team recommendations in September. The research will be compiled into a comprehensive report that will be presented to Ms. White in October.
“The SEC and other organizations are very interested in seeing what the students recommend and exploring the options for implementing changes to the 10K,” Dr. Forrer said. “We are very excited about the partnership with CAQ and the research opportunities it is creating for our students.”