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2017 PCAOB Budget and Accounting Support Fee Approved

Last month, the Securities and Exchange Commission approved the Public Company Accounting Oversight Board’s (“PCAOB”) budget and accounting support fee for 2017. This year, the PCAOB’s budget will be $268.5 million and funded by an accounting support fee collection equaling $268 million. The budget is a four-percent increase from 2016 ($257.7 million). Additionally, 2017’s accounting support fee is a six-percent jump from the 2016 fee ($253.3 million).

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SEC Called Out for Lack of Staff Oversight

A report by the Government Accountability Office (“GAO”) says the Securities and Exchange Commission (“SEC”) has made limited progress on improving oversight of the agency’s staff. Published on December 29, the report notes that the SEC continues to provide insufficient management of staff members and has yet to develop procedures for reviewing performance, improving collaboration efforts, and regularly assessing progress made. The SEC’s Division of Corporation Finance received some of the blame for not giving supervisors expectations in how to resolve workplace problems and train employees.

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SEC Committee Fails to Reach Consensus on Board Diversity

The Securities and Exchange Commission’s (“SEC”) Advisory Committee on Small and Emerging Companies recently failed to agree on proposed changes to improve disclosures regarding board diversity. During its December 7 conference call, panel members held lengthy discussions about the diversity disclosure recommendations but could not reach a consensus to vote. Per Release No. 33-9089, Proxy Disclosure Enhancements, public companies must disclose in proxy statements if diversity plays a role in their director nomination process and how such considerations are made. The release, however, does not provide a clear definition of “diversity,” but gives companies the freedom to determine how the. Read More.

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FY16 SEC Enforcement Rules Announced

The Securities and Exchange Commission (“SEC”) announced last week the filing of 868 enforcement actions during fiscal year 2016. Actions included companies and their executives engaging in financial reporting misconduct, as well as transgressions by registrants and gatekeepers. The SEC contributes the enhanced use of data and analytics to help detect misconduct and accelerate the investigation process. Fiscal year 2016 showed an increase in actions concerning investment advisers and Foreign Corrupt Practices Act violations. In addition, issuer reporting and disclosure matters continued to be a priority last year. The SEC also held various gatekeepers accountable for failing to comply with. Read More.

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PCAOB Amendments to Rule 4003 Receive SEC Approval

Amendments to Public Company Accounting Oversight Board (“PCAOB”) Rule 4003, Frequency of Inspections, have been approved by the Securities and Exchange Commission (“SEC”). Effective immediately, the amendments address how often the audit regulator performs inspections of various groups of registered public accounting firms. The amendments also: Remove the triennial inspection requirement for “substantial role only” firms, and replace it with a requirement to inspect at minimum five percent of such firms annually; Preserve the requirement to inspect firms that issue audit reports for an issuer but give the PCAOB permission to decline an inspection for any firm that does not. Read More.

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Public Companies Urged to Use Revenue Standard Panel’s Meeting Minutes

As the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard prepares to take effect in 2018, Securities and Exchange Commission (“SEC”) Chief Accountant James Schnurr is pushing public companies to follow the guidance in the Transition Resource Group’s (“TRG”) meeting minutes when implementing Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers. At last week’s SEC Speaks conference, Schnurr said while the TRG’s conclusions are not authoritative, companies should still use them in practice. Additionally, any alternative approach a company takes must be communicated to the SEC. FASB Vice Chairman and TRG Co-Chairman Jim Kroeker praised Schnurr’s comments,. Read More.

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