Accounting Question on Form 8-K The process used to regulate the submission and examination of corporate financial document filings -- which is overseen by the United States Securities and Exchange Commission (SEC) -- is fundamental to the sustainable growth of a capitalist economy, because these filings act as a necessary measure of transparency for investors and financial managers. Without the meticulously gathered data compiled and submitted by public companies within regular SEC filings, investors would have no legitimate ability to analyze variables to arrive at the most prudent course of financial action. Furthermore, in the absence of SEC filings unscrupulous corporate executives would be inordinately tempted to manipulate certain aspects of the financial system, either in the pursuit of personal profit or to protect their company's interests in the event of losses. As the SEC's website states, "companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports & #8230; (and) these reports are available to the public through the SEC's EDGAR database" (2013), a benchmark requirement which speaks to the foundational nature of these filings. Among the dozens of common...

From the bankruptcy filing of a core asset to the unexpected departure of a tenured executive, large companies must contend with a continuously shifting set of internal and external variables, and Form 8-K is used to keep investors and other stakeholders informed when these variables impact the company's operational direction.
In the case of JNJ, which filed a Form 8-K on August 2, 2012 -- to inform the SEC that the discontinuation of a promising research project into Alzheimer's drugs has resulted in an after tax net charge of between $300 and $400 million -- the decision to make such information public was undoubtedly troubling for company executives, because this revelation will surely result in a reduction in stock prize and the diminishment of investor confidence. The question of whether JNJ should have avoided filing Form 8-K until after its quarterly 10-Q filing occurred in at least two months is a delicate issue, because this step would obviously save the company from a whole host of issues…