Inspection of books and records

Inspecting books and records sounds complicated, but it’s fairly straightforward. A company’s performance is something investors want to keep track of. Stockholders should be concerned with the success of their company as their performance influences profit.

Investors have the right to “inspect the books and records" of the companies they’re invested in. The Securities and Exchange Commission (SEC) also enforces reporting requirements for publicly traded companies by requiring these documents to be created and distributed regularly:

10-K annual report

• Audited financial report
• Example: Tesla 10K filing

10-Q quarterly report

• Unaudited financial report
• Example: Microsoft 10Q filing