SEC Advisor Speaks on Materiality and Auditor's Report
At a recent speech for management accountants at a conference in Tulsa, OK, Stephen Deane discussed mini-case studies on policymaking associated with materiality and the independent auditor’s report. Deane, an investment engagement advisor in the Securities and Exchange Commission’s (“SEC”) Office of the Investor Advocate, said that the mini-case studies offer insight into the policymaking process and the problems that policymakers face. The mini-case studies also distinguish between outside investors and managers inside the company.
During his speech, Deane provided attendees a technical review of the Financial Accounting Standards Board’s attempts to establish materiality guidance and the Public Company Accounting Oversight Board’s efforts to expand the auditor’s report. He noted that materiality and the expanded audit report reflect attempts to decrease the informational irregularities that investors face.
Deane urged the attending management accountants to consider the importance of their work, which is to provide investors financial disclosures that are essential to capital markets and the economy, and that are beneficial to everyone.