Demystifying Disclosure Controls: Understanding Them to Effectively Leverage Toward Objectives

Abstract

All organizations are subject to some degree of disclosure requirements, which are also commonly called external reporting requirements. They can be as simple as filing tax returns or as complex as meeting applicable rules and regulations of a governmental regulator, such as the U.S. Securities and Exchange Commission (SEC). No matter the extent, organizations are well advised to have robust disclosure controls in place to help ensure that external disclosures are prepared and delivered in accordance with the applicable external reporting requirements. While the article tackles disclosure controls mostly from SEC's definition, it also has ideas for entities not subject to SEC rules and regulations since this is a topic that applies to all types of organizations. It is essential to complete disclosures in an accurate, timely and complete manner to protect against adverse legal actions and to preserve the organization's reputation. The interests of stakeholder groups such as governments, creditors and regulators are essential to the success of any business and ignoring or under-resourcing their requirements is a recipe for disaster that can be averted through appropriate disclosure controls.