New PCAOB White Paper Discusses Emerging Growth Companies
A new white paper by the Public Company Accounting Oversight Board (“PCAOB”) features significant observations about emerging growth companies. Published as White Paper on Characteristics of Emerging Growth Companies , the report includes information from recent Securities and Exchange Commission (“SEC”) filings and statistics from third-party vendors as of November 15, 2016. Some of the key observations discuss the emerging growth companies with common equity securities on U.S. exchanges; the percentage of emerging growth companies not listed on an exchange and reported zero revenues and those that disclosed they were shell companies; and the filers that delivered management reports regarding internal control over financial reporting, and those filers. Read More.
Public Companies Must Add Hyperlinks to Regulatory Filings
Securities and Exchange Commission (“SEC”) Chair Kara Stein and Acting Chair Mike Piwowar have approved a rule requiring public companies to insert hyperlinks to the exhibits in their regulatory filings. Announced on March 1, the final rule calls for hyperlinks to each exhibit in a regulatory filing’s index to be included with a public company’s annual and quarterly reports as well as registration statements submitted via the SEC’s EDGAR system and formatted in HTML format. The rule does not apply to electronic exhibits for asset-backed securities offerings recorded on Form ABS-EE or exhibits kept under the eXtensible Business Reporting language. Read More.
New Law Reverses SEC Payment Disclosure Rule
On February 14, President Trump signed into legislation a bill that nullifies Release No. 34-78167, Disclosure of Payments by Resource Extraction Issuers. Issued by the Securities and Exchange Commission (“SEC”) last June, the provision was part of the Dodd-Frank Act and called for public oil, gas and mining companies to report payments distributed to domestic and foreign governments as part of their business actions. The rule was meant to provide investors transparency about payments publicly listed companies make to governments concerning mining and oil and gas production, but companies complained that the regulation was burdensome. The White House said the. Read More.
SEC Chief Accountant Pushes Board Diversity as a Priority
During his March 24 speech in Knoxville, Tennessee, Securities and Exchange Commission (“SEC”) Chief Accountant Wesley Bricker pressed audit committee members to make board diversity a priority on their upcoming agendas. Bricker said board diversity would help enhance the ability for an audit committee to oversee financial reporting and lower the possibility of group think. He also mentioned academic research which discovered that boards with diverse members experience improved quality in financial reporting, and are more probable to view management accountable for weak financial performance. Bricker’s push for diversity reflects investors calling for more diversity among corporate directors and those. Read More.
Dodd-Frank Whistleblower Protections Upheld
A broad interpretation of Dodd-Frank whistleblower protections was upheld this month by the Ninth Circuit Court of Appeals (“Ninth Circuit”). Earlier this month, the Ninth Circuit ruled that whistleblowers who report illegal behavior through their employer instead of the Securities and Exchange Commission (“SEC”) fall under the anti-retaliation protections. The decision was based on the case of Somers v. Digital Realty Trust, which involved the termination of Digital Realty’s former vice president being fired after reporting possible securities law violations. Paul Somers sued Digital Realty, claiming that his termination violated whistleblower protections under the Dodd-Frank Act. Digital Realty maintained that. Read More.
SEC’s Bricker Urges Implementation of Revenue Recognition Standard
Nearly 10 percent of public companies have not started to implement Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606). While the percentage is insignificant, Securities and Exchange Commission (“SEC”) Chief Accountant Wesley Bricker is telling unprepared companies they have no option but to begin the implementation process. At a panel discussion during the SEC Speaks conference on February 25, Bricker said that companies cannot overlook the importance of the Financial Accounting Standards Board’s revenue recognition standard and must prepare accordingly. He encouraged companies to communicate their implementation plans with audit committees, executive teams and others, and. Read More.
Topics: FASB, Financial Accounting Standards Board "FASB", Revenue from Contracts with Customers (Topic 606), Revenue Recognition, SEC, Securities and Exchange Commission "SEC", Staff Accounting Bulletin "SAB"