Table of Contents
Chapter 1 - The Public Company Environment1
| Public Company Accounting | 1 |
| Generally Accepted Accounting Principles | 3 |
| Public Company Finance | 3 |
| The Securities and Exchange Commission | 4 |
| The Issuer and Registrant Concepts | 6 |
| The Decline in Public Companies | 6 |
Chapter 2 - Earnings per Share Reporting9
| Basic Earnings per Share | 9 |
| Diluted Earnings per Share | 10 |
| Disclosure of Earnings per Share | 14 |
Chapter 3 - Segment Reporting17
| Overview of Segment Reporting | 17 |
| The Chief Operating Decision Maker | 19 |
| Segment Disclosure | 20 |
| Segment Disclosure | 20 |
| Products, Services, and Customer Disclosure | 22 |
| Geographic Area Disclosure | 22 |
| The Competitive Harm Issue | 23 |
Chapter 4 - Interim Reporting26
| Overview of Interim Reporting | 26 |
| General Interim Reporting Rule | 26 |
| Variations from the Interim Reporting Rule | 27 |
| Changes in Accounting Principle in Interim Periods | 28 |
| Changes in Accounting Estimate in Interim Periods | 28 |
| Error Correction in Interim Periods | 29 |
| Adjustments to Prior Interim Periods | 29 |
| Gross Profit Method | 29 |
| The Integral View | 30 |
| The Discrete View | 32 |
| Comparison of the Integral and Discrete Views | 32 |
| Disclosures for Interim Reporting | 32 |
Chapter 5 - Stock Issuances Accounting36
| The Sale of Stock | 36 |
| Dividend Payments | 37 |
| Stock Dividends and Stock Splits | 37 |
| Stock Dividend | 37 |
| Stock Split | 38 |
| Equity-Based Payments to Non-Employees | 38 |
| Overview of Stock Compensation | 40 |
| The Volatility Concept | 44 |
| Fair Value Calculation Alternatives | 44 |
| Awards Classified as Equity | 46 |
| Award Measurement Problems | 46 |
| Contingent Features | 46 |
| Award Modifications | 46 |
| Awards Classified as Liabilities | 47 |
| Employee Share Purchase Plans | 48 |
| Equity Disclosures | 49 |
| Rights and Privileges | 49 |
| Preferred Stock | 49 |
| Contingently Convertible Securities | 50 |
| Redeemable Securities | 50 |
| Changes in Shareholders' Equity | 50 |
| Equity-Based Payments to Non-Employees | 51 |
| Stock-Based Compensation Disclosures | 51 |
Chapter 6 - Debt Accounting55
| Debt with Conversion and Other Options | 55 |
| Debt Instruments with Detachable Warrants | 55 |
| Convertible Securities | 56 |
| Beneficial Conversion Features | 57 |
| Interest Forfeiture | 59 |
| Induced Conversions | 59 |
| Conversion by Exercise of Call Option | 59 |
| Convertible Instruments Issued to Nonemployees as Payment | 59 |
| Contingent Conversion Option | 60 |
| Own-Share Lending Arrangements | 60 |
| Own-Share Lending Arrangements (EPS Calculations) | 60 |
| Overview of Imputed Interest | 60 |
| Debt Disclosures | 63 |
| Long-Term Obligations | 63 |
| Short-Term Obligations to be Refinanced | 64 |
Chapter 7 - Staff Accounting Bulletins66
| Financial Statement Topics | 66 |
| Overhead Allocations | 67 |
| Pro Forma Financial Statements | 68 |
| Materiality | 68 |
| Debt Issuance Costs | 71 |
| Redeemable Preferred Stock | 71 |
| Equity Accounting Topics | 72 |
| Subordinated Debt | 72 |
| S Corporations | 72 |
| Change in Capital Structure | 72 |
| Receivables from the Sale of Stock | 72 |
| Limited Partnerships | 73 |
| Notes and Other Receivables from Affiliates | 73 |
| Miscellaneous Accounting Topics | 73 |
| Expenses of Offering | 73 |
| Gain or Loss from Disposition of Equipment | 74 |
| Accounting Changes Not Retroactively Applied Due to Immateriality | 74 |
| New Basis of Accounting Required in Certain Circumstances | 74 |
| Restructuring Charges | 75 |
| Impairments | 75 |
| Revenue Recognition Topics | 76 |
Chapter 8 - Annual and Quarterly Reporting78
| The Form 10-K | 78 |
| Item 1. Business | 80 |
| Item 1A. Risk Factors | 82 |
| Item 1B. Unresolved Staff Comments | 84 |
| Item 1C. Cybersecurity | 84 |
| Item 2. Properties | 85 |
| Item 3. Legal Proceedings | 85 |
| Item 4. Mine Safety Disclosures | 86 |
| Item 5. Market for Company Stock | 87 |
| Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation | 89 |
| Item 7A. Quantitative and Qualitative Disclosures about Market Risk | 91 |
| Item 8. Financial Statements and Supplementary Data | 94 |
| Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 94 |
| Item 9A. Controls and Procedures | 95 |
| Item 10. Directors, Executive Officers and Corporate Governance | 96 |
| Item 11. Executive Compensation | 98 |
| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 105 |
| Item 13. Certain Relationships and Related Transactions, and Director Independence | 106 |
| Item 14. Principal Accountant Fees and Services | 107 |
| The Form 10-Q | 108 |
| Information to be Incorporated by Reference | 109 |
Chapter 9 - Form 8-K Reporting112
Chapter 10 - Insider Securities Reporting123
| Forms 3, 4, and 5 | 123 |
| Related Topics | 124 |
Chapter 11 - Non-GAAP Reporting127
| The Disclosure of Non-GAAP Information | 127 |
| Practical Application of Non-GAAP Financial Measures | 129 |
| Non-GAAP Financial Measure Policies and Procedures | 129 |
| Non-GAAP Financial Measure Policies | 129 |
| Non-GAAP Financial Measure Procedures | 130 |
Chapter 12 - Fedwire Payments134
| Fedwire | 134 |
| Fedwire Payment Instructions | 135 |
Chapter 13 - The Initial Public Offering138
| Reasons for and Against an IPO | 138 |
| Preparation for the IPO | 139 |
| The Initial Public Offering | 141 |
| Blue Sky Laws | 144 |
Chapter 14 - The Reverse Merger147
| The Reverse Merger Concept | 147 |
| Advantages and Disadvantages of the Reverse Merger | 148 |
| The Price of a Shell | 150 |
| Shell Due Diligence | 150 |
| Trading Volume | 151 |
Chapter 15 - Registration Statements154
| Form S-1 | 154 |
| Form S-3 | 156 |
| Form S-8 | 157 |
| Exhibits to Registration Filings | 158 |
| Shelf Registration | 159 |
| Registration Statement Effectiveness | 160 |
Chapter 16 - Regulation A Stock Sales163
| Regulation A Stock Sales | 163 |
| Solicitations of Interest | 164 |
| Form 1-A | 164 |
Chapter 17 - Sale of Unregistered Securities – Regulation D167
| Regulation D Stock Sales | 167 |
| The Form D Filing | 169 |
| The Accredited Investor | 170 |
| Private Investments in Public Equity | 170 |
Chapter 18 - The Jumpstart Our Business Startups Act173
| Provisions of the JOBS Act | 173 |
Chapter 19 - Sale of Unregistered Securities – Rule 144179
| Rule 144 Stock Sales | 179 |
| Rule 144 Administrative Procedure | 180 |
Chapter 20 - Rule 10b5-1 Stock Sales183
| Rule 10b5-1 Stock Sales | 183 |
| Rule 10b5-1 Administrative Procedure | 184 |
Chapter 21 - Closing the Books187
| Basic Steps for Closing the Books | 187 |
| The Public Company Closing Process | 191 |
| The Form 10-Q Approval | 192 |
| The Form 10-K Approval | 192 |
Chapter 22 - Accounting and Finance Controls195
| Preventive and Detective Controls | 195 |
| General Controls for Public Companies | 195 |
| Basic Financial Statement Controls | 196 |
| Controls for Form 8-K Reporting | 199 |
| Controls for Forms 3, 4, and 5 Filings | 199 |
| Controls for Non-GAAP Financial Measures | 200 |
| Controls for Regulation A Stock Sales | 200 |
| Controls for Regulation D Stock Sales | 201 |
| Controls for Rule 144 | 202 |
Answers to Chapter Questions204
Glossary218
Index222
Course Details
Author: Steven M. Bragg, CPA
Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written more than 300 books and courses, including New Controller Guidebook, GAAP Guidebook, and Payroll Management.
Publication/Revision Date: 10/12/2026
Course Exam Questions (online): 65 (multiple-choice)
Program Delivery Method: NASBA QAS Self-Study
Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail
Course Level, Prerequisites, and Advance Preparation Requirements
| License | Course Level | Prerequisites | Advance Preparation Requirements |
|---|
| CPA | Overview | None | None |
* This program is appropriate for professionals at all organizational levels.
Sponsor ID Numbers
National Registry of CPE Sponsors ID: 107615
State CPA Board Sponsor ID Numbers (where applicable)
Florida Division of Certified Public Accounting: 0004761
Hawaii Board of Public Accountancy: 14003
New York State Board for Public Accountancy: 002146
Ohio Accountancy Board: CPE .51 PSR
Pennsylvania State Board of Accountancy: PX178025
Texas State Board of Public Accountancy: 009349
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Cite the activities that the SEC oversees, and the disclosures that it is most careful in reviewing.
- Specify the adjustments required to calculate diluted earnings per share.
- Identify the methods used to determine which segments of a business are reportable.
- Describe the process used to report segment information.
- Specify the concepts involved in the use of the integral and discrete views of interim reporting.
- Recognize the accounting to be used for stock options and employee share purchase plans.
- Identify the method used to value the components of a convertible security.
- Identify the proper reporting for a company filing a registration statement whose historical results are not indicative of its ongoing results.
- Specify the proper accounting for fees paid to an investment banker under various circumstances.
- Cite the required timing for the reporting of annual and quarterly reports, as well as the contents of those reports.
- Specify the circumstances under which a change in independent accountant must be disclosed.
- Specify the required timing for the filing of a Form 8-K, as well as the contents of the various disclosures.
- Recognize the responsibility level of a company for the filing of the Forms 3, 4, and 5.
- Describe the filing codes used by the Securities and Exchange Commission.
- Identify the source of the disclosure requirements for non-GAAP information.
- Recognize the circumstances under which Form 8-K disclosure of non-GAAP information is required.
- State the informational content of a Fedwire payment.
- Cite the restrictions placed on a company engaged in an initial public offering.
- Recognize the registration process for the auditors of a public company.
- Specify the reason why blue sky laws have been enacted.
- Identify the filing requirements associated with a reverse merger.
- Describe the advantages and disadvantages of using a reverse merger to go public.
- Specify the advantages of the Form S-3 registration, as well as the situations in which a Form S-8 registration can be used.
- Recognize the circumstances under which the Regulation A exemption can be used.
- State the filing requirements associated with a Regulation D securities sale.
- Recognize the types of investors who can now receive advertisements concerning the sale of securities.
- Identify the requirements under which an investor is allowed to sell shares under Rule 144.
- Specify the protection offered by Rule 10b5-1, and how an employee maximizes his or her protection under it.
- Recognize the additional steps required by a public company to close the books, and the extra approvals involved.
- Identify the types of controls, and which controls can be applied to the filing of certain SEC reports.
