What is Regulation S-X?
Regulation S-X governs the format and content of financial statements filed with the Securities and Exchange Commission (SEC) by publicly traded securities. These financial statements are prepared according to US GAAP and filed as part of registration statements mandated by the Securities Act of 1933; registration statements under section 12; annual or other reports; under section 13 and 15(d), and proxy and information statements outlined in section 14 of the Securities Exchange Act of 1934.
Closely related to Regulation S-K, Regulation S-X is broad-reaching in that it also encompasses all notes to financial statements and all related schedules. Publicly reporting companies must accurately disclose monies and other financial data, employing consistent terminology, in order to be compliant with Regulation S-X and the Sarbanes-Oxley Act.
Rule 1-02 of Regulation S-X also addresses accountants and auditors, requiring that they be registered and in good standing “under the laws of the place of his residence of principal office.” It further mandates that an accountant retain all records of an audit or review—including correspondence and ancillary documents—of an issuer’s financial statements for a period of seven years.
Regulation S-X was developed with input from the House Committee on Financial Services, Financial Accounting Standards with FASB Accounting Pronouncements, Federal Accounting Standards Advisory Board, Public Company Accounting Oversight Board, American Institute of Certified Public Accountants and International Accounting Standards Board.
Financial statements are often included in annual reports to company shareholders. The SEC also requires financial statements be created and submitted in XBRL (Extensible Business Reporting Language).