SEC Reporting Requirement: Clever Manufacturing Co., a public company that files various forms with the SEC, has recently been considered to be a very attractive growth stock and disagreements among the members of its Board of Directors and between management and the independent auditors over various accounting issues. It seems that management over the last few years always adjusts the boards accounting estimates in a direction that increases income for the period. Two board members have disagreed with managements changing its estimates and have asked for advice from the independent accounting firm.

After some heated debates among the board, management, and the independent accounting firm, two board members have resigned from the board. After further discussion with the accounting firm, the accounting firm has decided to withdraw as independent auditors of Clever Manufacturing. The controller of Clever now informs management that, being a public company, Clever might need to inform the SEC of these changes on an SEC Form 8-K. Management disagrees and informs the controller to keep quiet as to these disagreements, as public disclosure could have a negative impact on the companys stock price.

The controller asks for your advice as to whether this type of inside discussion among the board, management, and independent accounting firm needs to be reported to the SEC.

Required: Access the SECs website, and, under rules and forms, determine whether the resignation of the two board members and the accounting firm needs to be disclosed to the SEC and, if so, when. (Hint: Search for Form 8-K requirements.)