You are a high-profile enterprise risk management (ERM) consultant. Your specialty is review of regulatory risk disclosures across multiple industries. You have been retained by the SEC to review the Risk Factors (Section 1-A) from the 2022/23 10-K’s of a handful of Fortune 500 companies. The one that crossed your desktop today is for AMZN. You were also asked to analyze the 10-K from BABA.
SEC staff has asked you to prepare a report analyzing the two risk factor disclosures individually, in comparison to each other, and in comparison, to their sector peers. Your report shall use consistent definition of Risk Factors from Investor Responsibility Research Center Institute survey (“IRRCI”; s70616-5.pdf (sec.gov)Links to an external site.; page 11).
The specificity of the risk factor disclosures, and the length and structure of disclosures for each company.
- Which risk factors provide the most specificity? Which risk factors appear to be “boiler plate” disclosures?
- Are they consistent with the SEC’s guidance that the “discussion be concise and organized logically”?
Sample Solution