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- Managing COVID-19: Whether to Announce Preliminary Financial Results and Adjust Guidance
Managing COVID-19: Whether to Announce Preliminary Financial Results and Adjust Guidance
March 25, 2020, Covington Alert
The COVID-19 pandemic and its economic consequences have spurred a tremendous amount of market volatility, and many public companies can expect questions from shareholders and analysts regarding the effect of these factors on companies’ current and future operations and liquidity. The uncertainty of the pandemic’s duration and impact on the economy may lead some companies to stay silent until the next regularly scheduled earnings announcement. However, some companies may consider announcing preliminary financial results in advance of their regularly scheduled earnings release date, either to reassure the market and shareholders as to the operating performance and financial position of the company, or to alert shareholders about the likelihood that actual results will fall short of previously disclosed guidance. Further, companies that have disclosed guidance, and particularly quarterly guidance, may also consider whether it is appropriate to withdraw or update such guidance given the unprecedented economic dislocation brought about by the COVID-19 pandemic. This client alert discusses key considerations for companies navigating these issues.
January 28, 2020, Covington Alert
Critical audit matters, or “CAMs,” have been an important topic of discussion among investors, auditors, public companies and audit committees since the Public Company Accounting Oversight Board (“PCAOB”) adopted Auditing Standard 3101 (“AS 3101”) on June 1, 2017.
September 27, 2019, Covington Alert
On September 26, 2019, the Securities and Exchange Commission (the “SEC”) announced the adoption of new Rule 163B under the Securities Act of 1933 (the “Securities Act”), which expands the permitted use of “test-the-waters” communications to all issuers, regardless of size or reporting status. The new rule, which the SEC proposed in February 2019, represents a ...
April 30, 2019, Covington Alert
For the better part of this decade, the U.S. Securities and Exchange Commission (the “SEC”) has been assessing and soliciting input on, and proposing and adopting changes to, the public company disclosure regime. A principal goal of this exercise has been to improve the quality of disclosure while reducing compliance costs and other burdens on public companies. ...