Sometimes a question is just a Question

One of my mentors once told me this and it was a great lesson to learn, so I’ll share it here. It is often said by SEC staff when they issue comment letters that they are simply asking questions. As preparers, we often don’t believe this and try to be “one and done” in response. A career mentor, highly respected in the Accounting world once told me, “Michael, if you agree with what we did – just answer the question.”

While being the leader of the SEC preparation at a large Company, we received a comment letter, so like many of us preparers, I immediately jumped to all of the worst-case scenarios surrounding the question and tried to read into it rather than just answer it and support what we had done. Long story short after three back and forths “no further questions”. It was a gray area to be sure, but our position was thought out and supported. Yes we went back and forth a couple times, but in the end the SEC concurred with our position. We could have taken the short cut, fallen on our sword and changed our approach to “make the comment go away”. But that would have been the shortcut, the easy way out and would have been the wrong approach. So yes, in fact sometimes a question is just that – a question that needs to be answered.