controls/annotation_guidelines.md

Controls disclosure annotation guidelines v0.1

Status: candidate specification. Labels created by the project remain candidate_pending_independent_review until a second, independent reviewer adjudicates them. They are not called human-gold.

Scope

The unit is one SEC-filed 10-K or 10-Q primary HTML document. Evidence must come from Item 9A (10-K) or Part I, Item 4 (10-Q). Each present label records the exact excerpt, section name, source URL, and normalized-document character offsets. Definitions, risk factors, exhibits, table-of-contents entries, and prior-period statements outside the current controls conclusion do not support a present label.

Fields

1. icfr_effectiveness: effective, ineffective, or abstained. Annotate only an explicit current-period management conclusion about internal control over financial reporting (ICFR). A conclusion about disclosure controls alone is insufficient.
2. disclosure_controls_effectiveness: effective, ineffective, or abstained. Annotate only an explicit current-period management or certifying-officer conclusion about disclosure controls and procedures. Keep this separate from ICFR: one does not silently substitute for the other.
3. material_weakness_disclosed: boolean or abstained. true requires an affirmative current disclosure. A definition of “material weakness,” hypothetical risk, or a previously remediated weakness is not affirmative current evidence. false requires either explicit negative language or an effective ICFR conclusion. The latter is a disclosed, versioned inference based on the SEC consistency rule that management cannot conclude ICFR is effective while a material weakness exists.
4. remediation_status: ongoing, completed, not_applicable, not_disclosed, or abstained. Use ongoing only for an active weakness with explicit continuing, in-progress, or not-yet- remediated language. Use completed only when the filing says the relevant weakness was remediated and no current weakness is labeled. not_applicable follows a supported false material-weakness label. not_disclosed means a current weakness is supported but no matched status is present. Abstain if material-weakness status is unresolved.

Adjudication

Two reviewers label independently from the filed HTML and may not see system predictions. Compare the value and evidence span separately. Any disagreement is resolved by a third pass that records the rationale. For accelerated filers, the auditor's ICFR opinion is a cross-check, not a silent replacement for management's conclusion. Preserve management/auditor disagreements as an adversarial case. Amendments (10-K/A, 10-Q/A) are separate records and must not overwrite the original filing.

Required adversarial cases

• explicit “no material weaknesses were identified”;
• definition-only use of “material weakness”;
• a previously disclosed weakness that is now remediated;
• an active weakness that remains unremediated;
• disclosure-controls ineffectiveness with no ICFR conclusion;
• current and prior-period conclusions in the same section;
• a short table-of-contents heading before the substantive controls section.

Confidence is rule support, not a calibrated probability of factual truth.