PRSA APR Business Literacy (18%) Questions
with Verified Correct Answers
Business Literacy
The ability to use financial and business information as the basis for decisions that help an
organization achieve success.
10-K report (annual report)
An annual report that provides a comprehensive overview of a company. The 10-K must be
filed within 60 days after the close of the company's fiscal year. The report contains crucial
information, such as company's history, organizational structure, equity, holdings, earnings
per share, subsidiaries, footnotes, corporate exhibits, etc. Key section is Management's
Discussion and Analysis of Financial Conditions (MD&A).
Management's Discussion and Analysis of Financial Conditions (MD&A)
A key section of the 10-K annual report, the MD&A is where companies list strengths,
weaknesses, opportunities, and threats facing the company and its industry.
10-Q report (quarterly report)
A quarterly financial report containing unaudited financial data. The 10-Q is due 35 days
after the close of each of the first three fiscal quarters. There is no filing after the fourth
quarter because that is when the 10-K is filed.
8-K report (current report)
8-K filings are filed for unscheduled material or corporate events of importance to the
shareholders and the SEC. this is a great report to read to determine any significant problems
the company may be facing, such as litigation, executive malfeasance, or other problems.
, Proxy statements
Otherwise known as Form Def 14A, the proxy statement is produced for the benefit of
shareholders prior to the Annual Meeting of Shareholders so that they can make informed
decisions about matters due to be discussed at the Annual Meeting. Issues covered can
include proposals for new additions to the board of directors, information on directors' and
executives' salaries, info on bonus and option plans for directors and key managers, and any
declarations made by management.
Regulation Fair Disclosure (Regulation FD)
Requires that all publicly traded companies disclose material information to all investors at
the same time. Also opened quarterly analyst conference calls to small investors.
Sarbanes Oxley
Legislation that covers corporate auditing accountability, responsibility, and transparency.
Provisions within this law affect how information is disclosed. PR must know what a
company must disclose and when.
Securities Act of 1933 and Security Exchange Act of 1934
Enacted following the 1929 stock crash, these acts contain checks and balances for securities-
related actions. Certain sections of these laws directly relate to PR practice.
Rule 5C
Part of the Security Act of 1933, this led to the embargo of publicity materials during a
specific timeframe called the gag period.
Gag Period
with Verified Correct Answers
Business Literacy
The ability to use financial and business information as the basis for decisions that help an
organization achieve success.
10-K report (annual report)
An annual report that provides a comprehensive overview of a company. The 10-K must be
filed within 60 days after the close of the company's fiscal year. The report contains crucial
information, such as company's history, organizational structure, equity, holdings, earnings
per share, subsidiaries, footnotes, corporate exhibits, etc. Key section is Management's
Discussion and Analysis of Financial Conditions (MD&A).
Management's Discussion and Analysis of Financial Conditions (MD&A)
A key section of the 10-K annual report, the MD&A is where companies list strengths,
weaknesses, opportunities, and threats facing the company and its industry.
10-Q report (quarterly report)
A quarterly financial report containing unaudited financial data. The 10-Q is due 35 days
after the close of each of the first three fiscal quarters. There is no filing after the fourth
quarter because that is when the 10-K is filed.
8-K report (current report)
8-K filings are filed for unscheduled material or corporate events of importance to the
shareholders and the SEC. this is a great report to read to determine any significant problems
the company may be facing, such as litigation, executive malfeasance, or other problems.
, Proxy statements
Otherwise known as Form Def 14A, the proxy statement is produced for the benefit of
shareholders prior to the Annual Meeting of Shareholders so that they can make informed
decisions about matters due to be discussed at the Annual Meeting. Issues covered can
include proposals for new additions to the board of directors, information on directors' and
executives' salaries, info on bonus and option plans for directors and key managers, and any
declarations made by management.
Regulation Fair Disclosure (Regulation FD)
Requires that all publicly traded companies disclose material information to all investors at
the same time. Also opened quarterly analyst conference calls to small investors.
Sarbanes Oxley
Legislation that covers corporate auditing accountability, responsibility, and transparency.
Provisions within this law affect how information is disclosed. PR must know what a
company must disclose and when.
Securities Act of 1933 and Security Exchange Act of 1934
Enacted following the 1929 stock crash, these acts contain checks and balances for securities-
related actions. Certain sections of these laws directly relate to PR practice.
Rule 5C
Part of the Security Act of 1933, this led to the embargo of publicity materials during a
specific timeframe called the gag period.
Gag Period
