Executive Order Could Affect the SEC
President Trump recently signed an executive order that could have an impact on Securities and Exchange Commission (“SEC”) rulemaking. The Executive Order, Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs , calls for the elimination of two existing regulations for every new regulation introduced. In addition, the order sets the fiscal year 2017 regulatory budget at $0. The Public Company Accounting Oversight Board’s rulemaking efforts could also be affected by the president’s order. To read the executive order, please visit WhiteHouse.gov.
Updated PCAOB Agenda Delays Standard-Setting Projects
The Public Company Accounting Oversight Board’s (“PCAOB”) efforts to finalize and propose new standards are on hold by one quarter, according to the audit regulator’s updated standard-setting agenda. Projects that will be delayed include expansion of the auditor’s report, which the PCAOB hopes to adopt a final rule in the first quarter of 2017. PCAOB Chairman James Doty originally wanted the project completed last year. Two other projects delayed are proposals regarding audits of accounting estimates and the use of specialists. Originally expected to be issued during the first quarter, both proposals are now set for a second quarter release.
PCAOB 2015 Annual Report Released
Recapping activities and achievements from last year, the Public Company Accounting Oversight Board (“PCAOB”) published its 2015 Annual Report, Dedicated to Protecting Investors . The 2015 Annual Report features a summary of the PCAOB’s disciplinary orders in 2015, and highlights various major accomplishments. Such accomplishments include approving its audit engagement partner disclosure rule , reorganizing the PCAOB auditing standards for easier navigation, and hosting webinars for broker-dealer auditors. The PCAOB also reported that approximately 2,100 firms were registered with them at the end of 2015. Download the PCAOB 2015 Annual Report here.
SEC Deputy Chief Accountant Speaks at Financial Reporting Conference
As guest speaker at the 15th Annual Baruch College Financial Reporting Conference, Securities and Exchange Commission (“SEC”) Deputy Chief Accountant Wesley Bricker expressed his views on the current transition period undertakings for the upcoming revenue recognition and leases standards, and the Financial Accounting Standards Board’s proposal for financial instruments’ credit impairment. He also cautioned companies that presenting non-generally accepted accounting principles in public filings, especially adjustments to revenue, will increase the likelihood of receiving an SEC comment letter. He also spoke about the Public Company Accounting Oversight Board’s efforts to encourage auditor attention on financial reporting risks. A transcript of Bricker’s speech is available on. Read More.
PCAOB Seeking Feedback on Proposal
Investors continue to support the Public Company Accounting Oversight Board’s (“PCAOB”) proposal that provides additional disclosures to reports. Originating four years ago, Concept Release No. 2011-003, Possible Revisions to PCAOB Standards Related to Reports on Audited Financial Statements and Related Amendments to PCAOB Standards, is in response to complaints of the current report’s pass-fail model. Investors felt the current model offers insufficient details, and desired more insight from the auditors who performed the audits. While the new proposal maintains the pass-fail model, it requests auditors to note critical audit matters (CAMs), which are issues they viewed during the audit as. Read More.