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PCAOB Approves Expanded Auditor’s Report

In a unanimous decision, the Public Company Accounting Oversight Board (“PCAOB”) has approved a rule to expand auditor reports in a Securities and Exchange Commission (“SEC”) filing. Announced on June 1, the new format will make filed auditor reports more valuable to investors. The rule requires a public company’s external auditor to disclose any critical audit matters that arise while auditing their clients, and provide details on clients’ financial reporting procedures. Such requirements are listed under Release No. 2017-001, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion and Related Amendments to PCAOB. Read More.

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Forums on Auditors of Broker-Dealers Coming This Fall

The Public Company Accounting Oversight Board (“PCAOB”) has released the schedule for its 2017 Forums for Auditors of Broker-Dealers. Only two forums are set for this year, which will be held at the following locations: Las Vegas, Nevada, on October 20, 2017 Jersey City, New Jersey, on December 7, 2017 This year’s forums include case studies and discussions on inspection observations and trends, enforcement issues, and auditor independence. Securities and Exchange Commission and the Financial Industry Regulatory Authority staff members will lead presentations on agenda topics. In addition, there will be an auditing standards update and a panel discussion about professional. Read More.

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SEC Asked to Use Principles-Based Approach for Disclosure Updates

In response to the Securities and Exchange Commission’s (“SEC”) efforts to amend the disclosure requirements for bank holding companies, one Big Four accounting firm has asked the agency to develop a principles-based framework. One Big Four firm remarked that disclosures under a principle-based approach would better align with how registrants oversee their business. The firm said such disclosures may help financial information users since the requirements allow a registrant to exercise judgment in reviewing how to meet compliance. In addition, the Big Four firm noted that while strict and consistent requirements could help investors compare banks, they typically do not. Read More.

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Final Standard for Securities Offerings Documents Approved

Last month, the American Institute of Certified Public Accountants’ Auditing Standards Board unanimously approved a final standard concerning an auditor’s responsibility regarding securities offerings documents not registered with the Securities and Exchange Commission (“SEC”). The final standard will likely be issued as Statement on Auditing Standards No. 133: Auditor Involvement With Exempt Offering Documents. It would impact securities that are not required to follow the SEC’s registration requirements and rules under the Securities Act of 1933. In addition, the standard will affect franchise offerings controlled by the Federal Trade Commission or appropriate state franchise laws. The standard could become effective. Read More.

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FASB Clarifies the Customer in Service Concession Arrangements

The Financial Accounting Standards Board (“FASB”) is providing relief to companies confused about who is the customer in a service concession arrangement. Issued as Accounting Standards Update No. 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services, the new guidance states that the grantor is the customer in service concession arrangements. Public companies, in addition to nonprofits that have issued, or are a conduit bond obligor for, securities traded, listed, or quoted on an exchange or an over-the-counter market and an employee benefit plan that submits financial statements to the Securities and Exchange Commission, must apply. Read More.

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SEC Chief Accountant Advises Against Credit Loss Standard Delay

In an unexpected move, Wesley Bricker warned banks not to drag their feet when implementing the Financial Accounting Standards Board’s (“FASB”) credit loss standard. At Baruch College’s Annual Financial Reporting Conference, the Securities and Exchange Commission’s (“SEC”) chief accountant shared his general concerns over Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Although Bricker provided few details, he did highlight how critical it is for implementation of the standard to be correct. Bricker also remarked that some bankers have approached him with their own concerns. In response, he advises. Read More.

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