A publicly traded company is one that sells shares of its common stock to the public. All publicly traded companies must disclose certain information about their operations, finances and management to the Securities & Exchange Commission for public perusal. These SEC disclosures are made quarterly, annually and at other times of the year as necessary. The information is designed to encourage accurate reporting and honesty so investors can use the information to make solid investing decisions.

Financial Statements

The SEC requires publicly traded companies to disclose their financial statements quarterly and annually. The quarterly statement filed to the SEC, called the 10-Q, includes the balance sheet, income statement, shareholder equity statement and cash flow statement, as well as an explanation of accounting procedures and notes from management explaining certain aspects of the report. At the end of its fiscal year the company must also file an annual 10-K. This contains many of the same statements as the 10-Q. It also consolidates all of the information into yearly totals and provides comparisons to prior-year performances.

Accounting Disclosures

Every publicly traded company must have its financial statements audited by an external public accounting firm. The accounting firm will report how well the company's executives are managing the business. The publicly traded company also must report its relationship to the accounting firm, the accounting firm's fees, and what kind of services it has performed for the previous two years.


The SEC disclosure process requires public companies to report all transactions that relate to its shares. The disclosure report must include the number of shares that are issued and outstanding. The publicly traded company must also report the shares of stock held by owners of the company, board members and directors if they hold more than 10 percent of the stock in the company. The disclosure should include all plans to purchase stocks, any stock that has been bought or sold by the executives, and any of their employee stock options.

Internal Affairs

A publicly traded company must submit annual reports that include information about its operations. It will detail the company's holdings, off-shore investments, liquidity, new business acquisitions, executive compensation, benefit changes and any other information that has had an impact on the company's financial affairs. This information provides insight into the financial condition and management philosophy of the company.