SEC Chief Accountant Credits Interpretive Guidance for Curbed Misuse of Non-GAAP Measures
Securities and Exchange Commission (“SEC”) Chief Accountant Wesley Bricker is crediting the reduced misuse of non-GAAP measures to the Compliance and Disclosure Interpretations (“C&Dis”) issued in May 2016. Bricker said the interpretive guidance for Regulation G, regulation covering non-GAAP financial information, has helped companies become better disciplined and disclose to investors the use of non-GAAP measurements. Bricker spoke on the C&DIs in October at the National Association of Corporate Directors’ Global Board Leader’s Summit. He remarked that since the C&DIs were issued, public companies have quit highlighting non-GAAP measures more predominately than their audited results. Companies have also established policies. Read More.
SEC Improves Internal Controls
According to a recent Government Accountability Office (“GAO”) report, the Securities and Exchange Commission’s (“SEC”) internal controls are improving. In fiscal 2015, only six of the SEC’s 58 internal supervisory controls tested had deficiencies. Comparative to the GAO’s 2013 review, the six deficiencies mark a significant reduction from the 27 flaws identified in fiscal 2011. The GAO noted that none of the flaws are likely to inhibit the SEC from ensuring their divisions and offices carry out actions accordingly. Specifically, the watchdog agency found two flaws without clear control activities, three that showed a major element did not align with. Read More.
Topics: Division of Corporation Finance "Corp Fin", Division of Enforcement, Dodd-Frank Act, GAO Report, Government Accountability Office "GAO", Internal Controls, Office of Compliance Inspections and Examinations, Securities and Exchange Commission "SEC"
Companies Advised to Use Established Internal Controls Guidance
Speaking last month on concerns regarding the reporting requirements for internal controls, Securities and Exchange Commission (“SEC”) Deputy Chief Accountant Brian Croteau recommended companies and auditors to use the agency’s existing two-part evaluation process. Per his speech at the American Institute of Certified Public Accountants’ Conference on Current SEC and Public Company Accounting Oversight Board Development, Croteau said companies should evaluate whether a material misstatement about their financial reporting controls is possible by using the interpretive guidance in Release No. 33-8810, Commission Guidance Regarding Management’s Report on Internal Control Over Financial Reporting Under Section 13(a) or 15(d) of the Securities. Read More.
SEC Announces Rules for NRSRO-Registered Credit Rating Agencies
Affecting credit rating agencies registered with the Securities and Exchange Commission (“SEC”) as nationally recognized statistical rating organizations (“NRSROs”), the SEC has adopted new amendments that improve governance, defend against conflicts of interest, enhance credit ratings quality and provide increased accountability. The SEC-issued requirements also address: internal controls; reporting of credit rating performance data; procedures that protect rating methodologies; disclosures to encourage credit ratings transparency; and standards for the training, experience and proficiency of credit analysts. Also adopted by the SEC are requirements affecting issuers, underwriters, and third-party due diligence services. The requirements will support clear findings and conclusions of. Read More.
Topics: Asset-backed Securities "ABS", Credit Rating, Internal Controls, Nationally Recognized Statistical Rating Organizations "NRSROs", Rating Methodologies, U.S. Securities and Exchange Commission "SEC"