The company's disclosures are characteristically reviewed by the SEC staff for one of two general reasons:

1. the company has filed a registration statement that has been screened and met the common criteria for review
2. the company's Form 10-K was selected for a customary periodic review

Screening criteria beyond these involve a defined and stratified interest of the SEC staff that is industry or company specific and involves a much more focused review protocol. When this is the case, multiple offices of the agency hierarchy can be involved.

In reviews related to securities registration, the SEC staff has the power to delay the company's access to capital and in the more difficult cases, obstruct access to capital until all disclosure issues have been resolved to the staff's satisfaction. This can go on for months, lead to restatements of the financials and last well past the enterprise's window of opportunity for accessing capital.

Protracted SEC comment periods and financial restatements are also powerful staff instruments in non-registration reviews and have effects well beyond the moment in both cases. When they result in investor confidence being diminished or depleted, capital sources dry up and investors abandon the company's securities, creating overwhelming pressure on their value and the company's capitalization.

The soundest practice against these types of investor uncertainty is to have a disclosure architecture in place that minimizes the risk of material disclosure errors or omissions. This single practice establishes an informed investor and instills a lasting confidence in the SEC staff about the enterprise's commitment to full and fair disclosure. In turn, it expedites the company's access to capital and keeps periodic SEC staff inquiries to a minimum.