Most companies do a good job of reviewing and updating their Form 10-K risk factors once a year. It’s relatively easy to re-read last year’s risk factors, determine what has changed in the interim and make appropriate revisions. Many companies pay much less attention, however, to quarterly risk factor updating.
Form 10-Q expressly requires that companies “set forth any material changes from risk factors as previously disclosed in the registrant’s Form 10-K.” Despite this mandate, it is relatively rare for a company to provide new risk factor information in a quarterly filing. It seems implausible, however, that a company’s risk factors would conveniently change only each February when its Form 10-K is being reviewed while remaining static the rest of the year.
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