Supreme Court Tightens Dodd-Frank Whistleblower Protections
In a unanimous ruling, the Supreme Court narrowed the definition of a whistleblower under the Dodd-Frank Act. The U.S. Court of Appeals for the Second, Fifth and Ninth Circuits had different rulings over the interpretation of the whistleblower protections, but the Supreme Court ultimately decided on a narrow definition. The decision stems from the case of Digital Realty Trust v. Somers, which involved the termination of former Digital Realty Trust vice president Paul Somers after he reported possible violations to management. Somers claimed that the Dodd-Frank whistleblower protections, which bar companies from retaliating against employees who report misconduct under certain. Read More.
SEC Approves Revised Cybersecurity Disclosure Guidance
On February 21, the Securities and Exchange Commission (“SEC”) unanimously approved new interpretive guidance concerning public company disclosures related to cybersecurity. The updated guidance in Release No. 33-10459, Commission Statement and Guidance on Public Company Cybersecurity Disclosures, outlines the SEC’s thoughts on public companies’ disclosure requirements regarding cybersecurity risks, threats and incidents. Release No. 33-10459 also encourages public companies to implement cybersecurity policies and procedures and to apply disclosure controls and procedures, insider trading prohibitions, and Regulation FD and selective disclosure prohibitions. The SEC believes the interpretive guidance will help public companies provide more transparent and detailed disclosures about potential threats to their computer systems and networks. Release No. 33-10459 is effective. Read More.
FASB to Revisit Segment Reporting Standard
As investors and analysts’ frustrations continue over segment reporting, the Financial Accounting Standards Board (“FASB”) plans to improve the consistency and application of its guidance. The FASB wants to amend Accounting Standards Codification (“ASC”) 280, Segment Reporting, which requires businesses to disclose information regarding management’s decision-making process and methods for reviewing segment performance. The standard also lists disclosure requirements on products and services, geographic regions, and a company’s top customers. Investors complain that the standard’s disclosure requirements can be excessively wide-ranging. They also say that the current guidance forces companies to group too many operating units, which makes it difficult. Read More.
Guidance Proposed on Environmental, Social and Governance Risks
The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and the World Business Council for Sustainable Development are proposing new guidance to help companies respond to environmental, social and governance-related risks. In the draft guidance, Applying Enterprise Risk Management to Environmental, Social and Governance-Related Risks, the organizations discuss the changing global risk landscape, principles of the COSO Enterprise Risk Management Framework, and ways companies can address environmental, social and governance-related risk challenges. The draft guidance also offers examples of risk events and potential costs of failing to manage them. A press release on the draft guidance is available on the COSO website.
Limited Proposal Coming for Payments in Collaborative Arrangements
The Financial Accounting Standards Board (“FASB”) plans to issue for public comment a limited proposal that clarifies when to account for payments in collaborative arrangements as revenue. The proposed amendment to Topic 808, Collaborative Arrangements, would state that certain transactions between collaborative partners that are separate from third-party sales can create revenue that is accounted for consistent with Topic 606, Revenue From Contracts With Customers. FASB members unanimously approved releasing the proposal after reviewing feedback from its December workshops with auditors and companies. Members rejected calls for more specific guidance, stating that it would be tough to establish such guidance for. Read More.
AICPA Board Could Revise Benefit Plan Audit Proposal
The American Institute of Certified Public Accountants’ Auditing Standards Board could revise a proposal for audits of benefit plans under the Employee Retirement Income Security Act of 1974 (“ERISA”). At a meeting last month in New Orleans, the board discussed possible changes after reviewing comment letters on Proposed Statement on Auditing Standards: Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. The proposed standard aims to help auditors understand their role and provide interested parties additional information on auditors’ responsibilities, especially in circumstances when the audit’s scope is limited. After previous talks on submitted. Read More.