CPAs and Advisors with Your Growth in Mind

SEC Approves PCAOB’s 2019 Budget

One month after the new Public Company Accounting Oversight Board (“PCAOB”) leadership approved a budget increase for 2019 , the Securities and Exchange Commission (“SEC”) published a release approving the PCAOB budget. Release No. 33-10592, Order Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2019, gives the PCAOB the ability to have a $273.7 million budget this year. This year’s budget is a 5.3 increase from 2018 ($259.9 million). Release No. 33-10592 also orders the PCAOB to schedule monthly meetings during 2019 with SEC staff to provide updates on initiatives that could impact the 2020 budget. Additionally this year, the SEC PCAOB must continue providing the SEC. Read More.

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SEC Compliance Office Announces Examination Priorities for 2019

The Securities and Exchange Commission’s (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) has announced the following examination priorities for 2019: Digital assets Cybersecurity Compliance and risk at registrants responsible for critical market infrastructure; Matters of importance to retail investors Financial Industry Regulatory Authority, Inc. (“FINRA”) and Municipal Securities Rulemaking Board (“MSRB”) operations Anti-money laundering programs OCIE plans to review digital assets because of the rapid growth of the cryptocurrency market and the potential risks the market may present investors. Digital asset market participants (e.g., broker-dealers, investment advisors) are also on the rise. OCIE plans to continue monitoring how digital. Read More.

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Proposed Volcker Rule Amendment Excludes Community Banks

Five financial regulators have issued a proposal to omit certain community banks from the Volcker Rule, which limits proprietary trading. The Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Reserve, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission propose excluding from the Volcker Rule community banks possessing equal or less than $10 billion in total consolidated assets and trading assets, and liabilities equal or less than five percent of total consolidated assets. Issued as Release No. BHCA-5, Proposed Revisions to Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and. Read More.

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Revised Treatment of Incomplete or Inadequate Prime Contractor Cost

The Defense Contract Audit Agency (“DCAA”) issued revised guidance on the treatment of incomplete or inadequate prime or higher-tier (hereinafter referred to as “prime”) contractor cost or price analyses during a forward pricing proposal audit. This new guidance, effective immediately, cancels the previous guidance established in 2009 and in 2017. Federal Acquisition Regulation (“FAR”) 15.404-3(b) requires the prime or higher-tier contractor to conduct cost or pricing analyses to establish reasonableness of the proposed subcontractor costs. Under the previous guidance, if the prime contractor did not complete and submit the required subcontractor cost or price analyses with its own proposal, DCAA classified. Read More.

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Investor Advocate Says SEC Gave Insufficient Analysis on Expanding Small Company Definition

An investor advocate with the Securities and Exchange Commission (“SEC”) believes the agency failed in its research efforts when analyzing the expansion of its small company definition. In a report to Congress issued on December 20, 2018, Rick Fleming said the SEC should have conducted further analysis before adopting Release No. 33-10513, Amendments to Smaller Reporting Company Definition. Release No. 33-10513 raises the public float threshold for smaller reporting companies from $75 million to $250 million, which allows nearly 1,000 companies to qualify for the disclosure requirements. Additionally, a company without a public float or with a public float under. Read More.

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