AccountingLink

    SEC/Other regulators

    16 November 2017

    SEC Reporting Update - Spotlight on cybersecurity disclosures
    After the Securities and Exchange Commission (SEC or Commission) said its EDGAR filing system had been compromised, SEC Chairman Jay Clayton issued a statement about the importance of cybersecurity to the Commission and to SEC registrants and signaled that the SEC staff will increase its scrutiny of companies’ disclosures about cyber incidents and their cybersecurity programs. In this publication, we outline how public companies should approach their cybersecurity disclosures and provide examples of disclosures some companies have made.

    15 November 2017

    Comment Letter - PCAOB supplemental request for comment on proposal on audits involving other auditors
    In our comment letter, we continued to support the PCAOB’s efforts to strengthen the requirements for the lead auditor in an audit involving other auditors. However, we recommended ways to make the proposal more practical, particularly the proposed requirements related to compliance with independence and ethics requirements and the qualifications of other auditors.

    1 November 2017

    Trends in US IPO registration statements
    Initial public offering (IPO) activity in the US rebounded in 2017 from 2016’s slow pace, and the outlook for IPOs is strong. Our publication analyzes recent US IPO activity and discusses trends in US IPO registration statements and common IPO accounting and reporting pitfalls. The publication also discusses the SEC staff’s recently expanded nonpublic review program and how emerging growth companies are using the various accommodations available to them under the Jumpstart Our Business Startups Act of 2012. It also highlights the most common accounting areas for restatements of financial statements during the IPO process and trends in the voluntary disclosure of material weaknesses in IPO registration statements.

    26 October 2017

    To the Point - AICPA staff answers questions about the definition of a public business entity
    The AICPA staff issued a technical question and answer document to address questions raised by preparers about certain terms used in the definition of a public business entity (PBE). The document reflects the AICPA staff’s recent discussions with the FASB staff, which may change an entity’s conclusion about whether it is a PBE.

    12 October 2017

    To the Point - SEC proposes modernizing and simplifying certain Regulation S-K disclosure requirements
    The SEC proposed amending Regulation S-K to modernize and simplify certain disclosure requirements as part of a broader review aimed at reducing the compliance burden on registrants while still providing all material information to investors. Among other thing, the proposal would allow a registrant to omit a discussion of the earliest annual period from Management’s Discussion and Analysis if the discussion is not considered to be material and the discussion of that period was included in the prior-year Form 10-K. The proposal also would allow a registrant to omit commercially sensitive and confidential information without obtaining advance permission from the SEC staff. Comments are due within 60 days.

    5 October 2017

    To the Point - PCAOB asks for more input on its proposal on supervision of other auditors
    The PCAOB issued a supplemental request for comment on its proposal to strengthen the requirements for supervising other auditors who participate in an audit but don’t issue the auditor’s report. Comments are due by 15 November 2017.

    25 September 2017

    SEC Comments and Trends - September 2017
    Our 2017 SEC Comments and Trends – An analysis of current reporting issues publication discusses in detail the SEC staff’s focus areas in its reviews of public filings in the year ended 30 June 2017. Our publication also identifies the top comment areas by industry. The publication provides best practices for responding to comment letters and will help you plan for the year-end reporting season.

    25 September 2017

    SEC Reporting Update - 2017 trends in SEC comment letters
    Our SEC Reporting Update publication highlights the SEC staff’s increased focus on non-GAAP financial measures over the last year and discusses emerging topics such as the new revenue standard and cybersecurity. The publication also explains the nature of the staff’s common comments on segment reporting, income taxes and management’s discussion. It also notes the continuing trend for the SEC staff to issue fewer comment letters than in the previous year.

    13 September 2017

    To the Point - Proposed alternative to agreed-upon procedures engagements would address stakeholder needs
    The AICPA has issued an exposure draft proposing the creation of a new attestation service that companies could use to have an accountant report to interested parties on the findings of procedures the accountant performed on an aspect of a company's business. The newly proposed service, selected procedures service would give companies a way to meet the needs of various stakeholders in situations that go beyond what is allowed for an agreed-upon procedures engagement.

    30 August 2017

    Comment Letter - PCAOB proposal on auditing estimates
    In our comment letter, we supported the PCAOB’s proposal to strengthen the requirements for auditing accounting estimates, including fair value measurements. However, we believe certain aspects of the proposal could be improved or made more practical, particularly the proposed requirements relating to the use of pricing information from third parties and the valuation of investments based on an investee’s financial condition or operating results.

    30 August 2017

    Comment Letter - PCAOB proposal on using the work of specialists
    In our comment letter, we supported the PCAOB’s proposal to strengthen the requirements for using the work of specialists. We asked the PCAOB to clarify some of the proposed requirements for using the work of a company specialist that we believe could be interpreted as requiring auditors to do significantly more work than they currently do. In addition, we expressed concerns regarding the proposal to rescind Auditing Interpretation 11, Using the Work of a Specialist: Auditing Interpretations of AS 1210, which we believe provides important prescriptive guidance and examples to help auditors assess the level of assurance obtained from legal opinions.

    21 August 2017

    Comment Letter - ASB proposed auditing standard for ERISA plans
    In our comment letter, we support the Auditing Standards Board’s efforts to improve the quality of ERISA plan audits. We recommend that auditors be required to test only plan provisions where noncompliance could result in a risk of material misstatement to the financial statement amounts or disclosures. We do not believe auditors should be required to report findings resulting from testing those provisions in the auditor’s report.

    3 August 2017

    To the Point - AICPA issues new attestation guide amid growing investor interest in sustainability reporting
    To address the growing interest in sustainability reporting, the AICPA issued a new attestation guide to assist accountants in performing and reporting on companies’ sustainability information. Investors and other stakeholders are more often taking into account sustainability issues in their decision making, and many believe it is important for this information to be subject to independent assurance.

    27 July 2017

    Technical Line - Financial reporting obligations under SEC Rule 701 for private companies that issue equity compensation
    As companies remain private longer and continue growing, they often pass the $5 million threshold for the aggregate sales or issuances of securities to employees and other covered persons within a 12-month period, thus triggering the requirement under SEC Rule 701 to provide financial statements and other disclosures to participants in the offering. We are finding that companies may not be aware of the financial reporting obligations under Rule 701 and may not want or be able to provide, even confidentially, the required information to offering participants for competitive reasons. Our Technical Line highlights what private companies need to do to comply with the financial reporting requirements under Rule 701.

    6 July 2017

    To the Point - SEC staff substantially expands scope of confidential review program for draft registration statements
    The SEC staff in the Division of Corporation Finance said it will accept draft initial registration statement submissions from all companies and Securities Act registration statement submissions in the first year after a company goes public for review on a non-public basis. The SEC staff also said that companies may now omit financial information that they reasonably believe will not be required at the time the registration statement is publicly filed. These expansions of the confidential review program are the first actions by the SEC staff to ease regulatory requirements under Chairman Jay Clayton, who has said that facilitating capital formation is a priority.

    8 June 2017

    To the Point - PCAOB proposes expanding guidance on auditing estimates and using the work of specialists
    The PCAOB proposed expanding the requirements for auditing accounting estimates, including fair value measurements. The PCAOB also proposed expanding the requirements for evaluating the work of a company’s specialist and applying a risk-based approach to supervising and evaluating the work of specialists employed or engaged by the auditor. Comments on both proposals are due by 30 August 2017.

    5 June 2017

    To the Point - PCAOB adopts final standard to significantly change the auditor’s report
    The Public Company Accounting Oversight Board (PCAOB) adopted a final standard that requires auditors to include significantly more information in their auditor’s reports. The standard requires the auditor to include in the report a discussion of critical audit matters for audits of large accelerated filers beginning in 2019 and all other filers in 2020. The standard also requires auditors to add information about auditor tenure, clarify the language about the auditor’s responsibilities and change the organization and format of reports are effective for periods ending on or after 15 December 2017. The standard is subject approval by the SEC, and interested parties will have an opportunity to provide comments.

    24 May 2017

    Comment Letter - SEC’s initiative to modernize Guide 3 disclosure requirements
    In our comment letter, we supported the Commission’s initiative to remove redundant or obsolete disclosure requirements and modernize Industry Guide 3: Statistical Disclosure by Bank Holding Companies. We also articulated concerns over the potential incorporation by reference in SEC filings of disclosures that bank holding companies currently provide under banking sector regulations.

    16 May 2017

    Comment Letter - SEC’s Inline XBRL proposal
    In our comment letter, we supported the objective of requiring structured data and data tagging to improve disclosure analysis and help investors and other market participants make more-informed decisions. However, we expressed concerns about requiring the use of Inline XBRL and suggested other actions that could be taken to improve the quality and reliability of financial statement data tagging. We noted that embedding tags in the financial statements could lead investors to assume such tags have been audited or reviewed and suggested ways to alleviate any expectation gap if the SEC moves forward with the proposal.

    26 April 2017

    To the Point - AICPA issues criteria for evaluating how an entity manages cybersecurity risk
    The AICPA issued Description Criteria for Management’s Description of an Entity’s Cybersecurity Risk Management Program and updated its Trust Services Criteria for Security, Availability, Processing Integrity, Confidentiality, and Privacy that together can be used by entities to describe their cybersecurity risk management programs and evaluate controls in these programs. An entity also can voluntarily choose to engage an independent public accountant to evaluate management’s description and whether the controls over its program were suitably designed and operated effectively.

    20 April 2017

    To the Point - Auditors would perform more tests and provide more information in reports on ERISA plans
    The Auditing Standards Board of the American Institute of Certified Public Accountants proposed a Statement on Auditing Standards for financial statement audits of employee benefit plans that are subject to the Employee Retirement Income Security Act (ERISA) in an effort to improve the quality of these audits and the relevance of the auditor's report. This publication focuses on how plan sponsors would be affected by the proposal, which would be effective for audits of financial statements for periods ending on or after 15 December 2018. Comments are due by 21 August 2017. We encourage plan sponsors to review the proposal, discuss it with their auditors and ERISA counsel and consider providing comments.

    6 April 2017

    To the Point - SEC Chief Accountant provides guidance on how audit committees can be more effective
    In a recent speech, SEC Chief Accountant Wesley Bricker discussed how audit committees can effectively discharge their oversight responsibilities. Among other things, he said it is important for audit committees to understand the financial reporting risks related to implementing new accounting standards, support controls over the disclosure of non-GAAP financial measures, understand changes in the business and operating environments, set a positive tone at the top to support effective internal control over financial reporting, and make sure the committee is not overloaded with responsibilities beyond its core mission.

    2 March 2017

    To the Point - SEC proposes requiring the use of Inline XBRL
    The SEC proposed a rule that would require operating companies and mutual funds to use Inline XBRL and embed tags in their financial statements and their risk/return summaries, respectively. The proposal would require Inline XBRL tagging on the same information operating companies and mutual funds currently include in separate XBRL exhibits. The requirement would be phased in over three years for operating companies based on filing status and over two years for mutual funds based on net assets. Comments are due 60 days after the proposal is published in the Federal Register.

    26 January 2017

    Technical Line - Tips for complying with the SEC reporting requirements for equity method investees
    Registrants should make sure they comply with the reporting requirements in Regulation S-X Rule 3-09 and Rule 4-08(g) for equity method investees. This publication discusses key considerations relating to how to calculate significance, reporting requirements if an investee meets certain thresholds of significance, applying the appropriate accounting standards in financial statements or financial information required under the rules, and interim disclosure requirements.

    19 January 2017

    Comment letter - SEC’s annual review under the Regulatory Flexibility Act
    In our comment letter, we recommend that the Commission consider making the periodic review required by the Regulatory Flexibility Act more transparent and more robust to encourage broader and meaningful participation by constituents. We believe an effective post-implementation review process should determine whether a rule has accomplished its objective, evaluate the compliance cost for all issuers and the benefits for investors and provide feedback to inform and improve the rulemaking process.

    22 December 2016

    SEC Comments and Trends – December 2016 – Media and entertainment industry supplement
    This publication is intended to give you insights into the SEC staff’s areas of focus involving media and entertainment registrants. It should be read in conjunction with our 2016 SEC Comments and Trends publication and our Technical Line, 2016 trends in SEC comment letters publication, which both discuss matters that relate to all registrants.

    12 December 2016

    2016 AICPA National Conference on Current SEC and PCAOB Developments
    Our compendium summarizes comments of representatives of the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB), the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) at last week’s 2016 AICPA National Conference on Current SEC and PCAOB Developments in Washington, D.C.

    1 December 2016

    2017 proxy statements - An overview of the requirements
    Our proxy publication is a reference tool for use when preparing the annual meeting proxy statement. It reflects all final SEC rules and interpretive guidance issued through 31 October 2016.

    1 December 2016

    Comment Letter - Proposal to revise Form 5500 filed by employee benefit plans
    In our comment letter, we supported the efforts of the Department of Labor, the Internal Revenue Service and the Pension Benefit Guaranty Corporation (collectively, the Agencies) to improve employee benefit plan reporting. However, we expressed concerns about the proposed disclosures of the name of the audit engagement partner, information about the plan auditor's peer review, certain audit matters communicated by the auditor and information about master trusts and assets held for investment presented in the supplemental schedules, including hard-to-value assets. We said we recognize the need to improve the limited scope certification and provided some additional recommendations. We also suggested that the Agencies meet with the AICPA and audit firms to help clarify the intent of certain proposed requirements so we can agree on a way to provide the Agencies with the information they need to fulfill their responsibilities.

    1 December 2016

    Pro forma financial information - A guide for applying Article 11 of Regulation S-X
    Our publication summarizes the requirements for pro forma financial information and illustrates how registrants may apply the guidance to different transactions and pro forma adjustments.

    1 December 2016

    To the Point - Tax rules on related party debt are narrower than what the Treasury Department and the IRS proposed
    The Treasury Department and the IRS issued regulations that will treat as stock for US federal income tax purposes certain related party interests that would otherwise be treated as indebtedness, and also establish extensive documentation requirements for those interests. The rules are limited to related party borrowings from a US entity to an affiliate that is not included in the US consolidated tax return. Entities need to identify and evaluate their related party loans that are in the scope of the rules to determine how they will be affected.

    30 November 2016

    Comment Letter - SEC’s request for input on Subpart 400 of Regulation S-K
    In our comment letter, we recommended the Commission consider reducing the current complexity around the timing of executive compensation disclosures in securities offerings and encourage a private sector initiative to develop guidance on the computation and disclosure of supplemental compensation metrics such as compensation “realizable” and “realized.” We also recommended that the Commission consider ways to enhance disclosures about diversity on public company boards and reconsider the definition of an audit committee financial expert.

    17 November 2016

    2016 SEC annual reports – Form 10-K
    We have updated our SEC Financial Reporting Series to reflect all final SEC rules and interpretive guidance issued through 31 October 2016. This publication is intended as a reference tool for preparing annual reports on Form 10-K.

    17 November 2016

    2017 SEC quarterly reports – Form 10-Q
    We have updated our SEC Financial Reporting Series to reflect all final SEC rules and interpretive guidance issued through 31 October 2016. This publication is intended as a reference tool for preparing quarterly reports on Form 10-Q.

    10 November 2016

    Update on emerging growth companies and the JOBS Act
    Emerging growth companies (EGCs) now dominate the initial public offering (IPO) market, accounting for 87% of IPOs that have gone effective since the JOBS Act was enacted in April 2012. Almost all EGCs have used a variety of the accommodations provided by the JOBS Act, including submitting registration statements confidentially, streamlining their executive compensation disclosures and providing audited financial statements for two years rather than three years. This publication provides an update on the IPO market trends in the US and analyzes how EGCs are using the relief available to them.

    31 October 2016

    Comment Letter - SEC proposal requiring exhibit hyperlinks
    In our comment letter, we support the SEC proposal to require registrants to include a hyperlink to each exhibit listed in the exhibit index of nearly all filings subject to Item 601 of Regulation S-K. We also reiterate our recommendation that the SEC adopt a company profile approach for organizing and presenting exhibits, other reference information, and information with respect to specific fiscal periods. We believe that approach ultimately will be a more effective way to provide access to corporate exhibits.

    31 October 2016

    Comment Letter - SEC proposal to eliminate redundant and outdated disclosures
    In our comment letter, we supported substantially all of the SEC’s proposals to eliminate disclosure requirements that have become redundant or outdated due to subsequent FASB standard setting or SEC rulemaking. We also recommended that the Commission consider rescinding a number of additional disclosure rules that, in our view, are duplicative or inconsistent with current US GAAP disclosure requirements.

    27 October 2016

    To the Point - SEC adopts rules to enhance investment company reporting
    The SEC adopted a rule that requires certain registered investment companies to report information about their monthly portfolio holdings to the SEC in an XML format on new Form N-PORT within 30 days of the end of each month. The SEC also adopted a requirement that registered investment companies, except face-amount certificate companies, file census-type information annually with the SEC in an XML format on new Form N-CEN within 75 days of the end of their fiscal year (or calendar year for unit investment trusts). The SEC also amended Regulation S-X to standardize and enhance disclosures about derivatives and other items in investment company financial statements.

    20 October 2016

    To the Point - Rules on fund liquidity risk management and swing pricing
    The SEC adopted a rule that requires registered open-end funds, including mutual funds and exchange-traded funds but not money market funds, to establish a liquidity risk management program and expand their disclosures about their liquidity and redemption practices The SEC also gave open-end funds (except for money market funds and exchange-traded funds) the option to use swing pricing to adjust their net asset value for costs associated with satisfying requests for shareholder purchases or redemptions (e.g., trading costs) in certain circumstances.

    13 October 2016

    Comment Letter - ASB’s proposal on auditor involvement with exempt offerings
    In our comment letter, we support the issuance of the Proposed Statement on Auditing Standards, Auditor Involvement With Exempt Offering Documents, which would require the auditor to perform certain procedures when the auditor is involved with an exempt offering document. Under the proposal, an auditor would be considered involved when (1) the auditor’s report on the financial statements or the auditor’s review report on interim financial information is included or incorporated by reference in the exempt offering document and (2) the auditor performs one or more specified activities (e.g., issues a comfort letter) with respect to the exempt offering document.

    10 October 2016

    Technical Line - A closer look at the SEC staff’s scrutiny of non-GAAP financial measures
    In the nearly six months since the Securities and Exchange Commission (SEC) staff updated its Compliance and Disclosure Interpretations (C&DIs) on non-GAAP financial measures, the staff has focused on compliance with that guidance in its reviews of earnings releases and SEC filings. The clear message is that companies need to reevaluate their use and presentation of non-GAAP financial measures. This publication discusses the SEC staff’s main areas of focus in comment letters seeking compliance with the updated C&DIs, changes companies have made to their disclosures and challenges companies are encountering with their non-GAAP disclosures.

    29 September 2016

    SEC Comments and Trends - September 2016
    Our 2016 SEC Comments and Trends publication provides an in-depth discussion of SEC staff focus areas in its review of public filings, including comments that focus on certain industries, initial public offering registration statements and foreign private issuers. Our publication is designed to help you understand what the staff is focusing on in its comments as well as best practices for responding to comment letters as you plan for the year-end reporting season.

    29 September 2016

    Technical Line - 2016 trends in SEC comment letters
    Our Technical Line highlights the SEC staff’s increased focus on non-GAAP financial measures and other trends in SEC comment letters in the year ended 30 June 2016, including the staff’s comments on segment reporting, loss contingencies and management’s discussion and analysis. We also note that, in the latest year, the SEC staff continued to issue fewer comment letters than it has in the past.

    8 September 2016

    Comment letter - SEC’s proposed amendment to the definition of smaller reporting company
    In our comment letter, we offered a view on how the Commission should approach any potential changes to its accelerated filer definition. We also recommended conforming Rule 3 05 of Regulation S X with the proposed $100 million revenue limit for smaller reporting companies (i.e., require no more than two years of audited financial statements when an acquired business has annual revenue below $100 million).

    4 August 2016

    Best practices when going through the IPO registration process
    Our publication provides insights for companies pursuing an initial public offering (IPO) and discusses common pitfalls and SEC staff focus areas that could create delays. The publication also includes a calendar to help companies navigate the SEC’s rules on filing deadlines.

    4 August 2016

    To the Point - Federal agencies propose revising Form 5500 filed by employee benefit plans
    The US Department of Labor, the Internal Revenue Service and the Pension Benefit Guaranty Corporation are seeking comments on their joint proposal to revise the Form 5500 filed by employee benefit plans. The proposal would apply to the Form 5500 for the 2019 plan year. Comments are due by 4 October 2016.

    29 July 2016

    Comment Letter - PCAOB proposal on audits involving other auditors
    In our comment letter, we supported the PCAOB’s efforts to strengthen the requirements for the lead auditor in an audit involving other auditors. However, we suggested that the lead auditor determination needs further study. We also offered some suggestions to make the amendments more scalable based on assessed risk and to allow lead auditors to rely on their firm’s system of quality controls when evaluating other auditors that are in their network.

    21 July 2016

    Comment Letter - Regulation S-K concept release
    In our comment letter, we recommend the SEC move to a disclosure framework that articulates clear disclosure objectives and allows registrants to more effectively communicate material information to investors. We ask the SEC to consider enhancements to various business and financial disclosures, including those related to the description of the business, risk factors and management’s discussion and analysis. We also suggest that the SEC explore ways to improve the presentation and delivery of information through a company profile approach.

    14 July 2016

    To the Point - SEC proposes eliminating redundant and outdated disclosures
    The SEC issued a proposal that would eliminate disclosure requirements that are redundant or outdated in light of changes in SEC requirements, US GAAP or IFRS or changes in technology or the business environment. The SEC is also seeking comments on whether it should modify or eliminate certain disclosure requirements that overlap with US GAAP and refer others to the FASB for potential incorporation into US GAAP.

    7 July 2016

    To the Point - SEC adopts final rule on resource extraction disclosures
    The SEC adopted a final rule that requires resource extraction issuers (REIs) to disclose payments they made to foreign governments or the US federal government by type and total amount for each project related to the commercial development of oil, natural gas or minerals in an annual Form SD filed with the SEC within 150 days of their fiscal year end. The rule, which was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, also requires REIs to disclose the type and total amount of payments made to each government for all projects. The rule is effective for fiscal years ending on or after 30 September 2018.

    24 May 2016

    To the Point - Global tax changes may affect multinational companies
    Governments around the world are developing legislation and reconsidering their interpretations of existing tax law to address concerns that multinational companies are shifting profits to jurisdictions with lower tax rates. Many of these efforts are based on recommendations the Organisation for Economic Co-operation and Development issued in its Base Erosion and Profit Shifting project. Multinational companies need to make sure they have processes and controls in place to track developments in countries that are significant to their operations and address any accounting implications in the appropriate period.

    19 May 2016

    To the Point - SEC staff updates guidance on non-GAAP financial measures
    The SEC staff updated its interpretations of the rules on non-GAAP financial measures and added new guidance to address its concerns about some types of non-GAAP financial measures and the manner of presentation of all such measures in earnings releases and SEC filings. In the updates, the staff clarified when it will consider non-GAAP measures misleading or too prominent. The staff also provided guidance on per-share non-GAAP measures and the income tax effects of adjustments used to calculate non-GAAP measures.

    13 May 2016

    To the Point - PCAOB reproposes significant changes to the auditor’s report
    The PCAOB issued a reproposal that would require auditors to include significantly more information in their auditor’s reports to make them more relevant and informative for investors and other stakeholders. The reproposal would require auditors to include information about matters that were communicated or required to be communicated to the audit committee that related to material accounts or disclosures and involved especially challenging, subjective or complex auditor judgment. The reproposal would also change the format and standard language of the auditor’s report and require auditors to include information about auditor tenure and auditor independence. Comments are due by 15 August 2016.

    12 May 2016

    To the Point - Policy issues for audit committee comment in the SEC’s S-K Concept Release on disclosure effectiveness
    Audit committees may want to comment on the concept release the SEC issued recently on how to improve business and financial disclosures required by Regulation S-K. Audit committee members may be most interested in the questions that address financial reporting issues such as materiality, risk management and public policy matters that could shape future SEC rulemaking to update its corporate disclosure requirements.

    28 April 2016

    Technical Line - Spotlight on non-GAAP financial measures
    SEC officials recently have expressed concerns about the growing use of non-GAAP financial measures in SEC filings and corporate earnings releases. This publication reviews the applicable SEC rules, highlights current SEC staff concerns and provides recommendations for companies that disclose non-GAAP metrics.

    21 April 2016

    To the Point - PCAOB proposes strengthening requirements for audits involving other auditors
    The PCAOB issued a proposal that would amend several of its standards to strengthen the requirements for supervising other auditors who participate in an audit. The proposal would also create a new standard for dividing responsibility for the audit with another accounting firm. Comments are due by 29 July 2016.

    14 April 2016

    Technical Line - Using the 2016 XBRL US GAAP Financial Reporting Taxonomy
    As we previously reported, the SEC has updated the EDGAR system to support the 2016 XBRL US GAAP Financial Reporting Taxonomy. The 2016 taxonomy includes new tags to address accounting standards updates, industry-specific issues, common terms and leading practices. Many tags were also deprecated or changed to reflect new definitions. Our publication summarizes the major changes to the taxonomy to help companies make the transition. It also discusses leading practices for creating XBRL exhibits and the SEC staff’s concerns about companies’ inappropriate use of custom axis tags.

    14 April 2016

    To the Point - CPAs will seek written assertions and representations under new AICPA attestation standards
    The AICPA’s Auditing Standards Board issued final clarified attestation standards that will require accountants to request written assertions and written representations for all examinations, reviews and agreed-upon procedures engagements. The clarified standards are effective for reports dated on or after 1 May 2017.

    14 April 2016

    To the Point - SEC explores possible changes to Regulation S-K requirements for business and financial disclosures
    The SEC issued a concept release seeking comment on possible ways to enhance the effectiveness of business and financial disclosures required by Regulation S-K. The concept release also seeks feedback on the disclosure framework the SEC uses to determine disclosure requirements and how it might improve the delivery of information to investors. Comments are due 90 days after publication in the Federal Register.

    30 March 2016

    Comment Letter - SEC’s proposal to regulate funds’ use of derivatives
    In our comment letter, we say closed-end funds that rely on the proposed exemption for derivatives and financial commitment transactions should not be required to reflect these instruments as senior securities in their senior securities table disclosures or as components of the calculations from which these disclosures are derived, and we recommend that the SEC provide guidance on this point. We also recommend that the SEC consider eliminating the requirement that the senior securities table be audited. Finally, we recommend that, if the SEC decides not to rescind the audit requirement, the SEC should clarify that an auditor’s responsibility regarding the senior securities table does not extend to evaluating a closed-end fund’s compliance with the provisions of proposed Rule 18f-4.

    22 February 2016

    Comment Letter - SEC rules implementing provisions of the FAST Act
    In our comment letter, we suggested that the SEC allow forward incorporation by reference of Exchange Act reports into Form S-1 by all registrants, not just smaller reporting companies as provided by the interim final rules adopted by the SEC in January. We also recommended that the SEC remove the Form S-1 and F-1 requirement for a registrant to be “seasoned” (i.e., file its first annual report) to be eligible to incorporate by reference. In addition, we suggested that the SEC allow an EGC to omit interim financial statements (and related pro forma information, MD&A and selected financial data) from its initial IPO filing or submission if they will not be required at effectiveness.

    14 January 2016

    Comment Letter - SEC’s fund liquidity and swing pricing proposal
    In our comment letter, we recommend that the SEC clarify how mutual funds that would be allowed to use swing pricing (i.e., adjust net asset value per share (NAV) for costs associated with satisfying requests for shareholder purchases and redemptions that exceed certain thresholds) would present NAV on the balance sheet and certain financial highlights and how they would adjust NAV for trade date activity, among other things. We also express our view that auditors should not be responsible for assessing the reasonableness of a fund’s swing pricing policies and procedures and recommend that the SEC clarify that point in any adopting release.

    17 December 2015

    To the Point - SEC proposes rule to limit use of derivatives by regulated investment companies
    The SEC proposed a rule to enhance investor protection by setting restrictions on the use of derivatives and financial commitment transactions by mutual funds, exchange-traded funds, closed-end funds and business development companies. In proposing the rule, the SEC said it was responding to growth in the volume and complexity of derivatives and their increased use by certain funds.

    16 December 2015

    To the Point - PCAOB adopts final rules for audit transparency disclosures
    The PCAOB adopted final rules that, subject to SEC approval, would require audit firms to name the engagement partner and provide information about other accounting firms that participated in the audit in a new form that would be filed with the PCAOB. Disclosure of the name of the audit partner would be required for auditors’ reports issued on or after 31 January 2017, and disclosures of other accounting firms would be required for auditors’ reports issued on or after 30 June 2017.

    16 December 2015

    To the Point - SEC proposes a new rule about payments to governments for extractive activities
    The SEC proposed rules that would require resource extraction issuers to disclose payments they made to foreign governments or the US Federal Government related to the commercial development of oil, natural gas or minerals in an annual Form SD filed with the SEC.

    15 December 2015

    2015 AICPA National Conference on Current SEC and PCAOB Developments
    Our compendium summarizes comments of representatives of the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB), the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) at the 2015 AICPA National Conference on Current SEC and PCAOB Developments in Washington, D.C.

    10 December 2015

    To the Point - New legislation makes changes to JOBS Act and other SEC requirements
    The Fixing America’s Surface Transportation Act, which was signed into law recently, changed provisions of the Jumpstart Our Business Startups Act (JOBS Act) and other SEC requirements in an effort to further facilitate capital formation by smaller companies. Some of the changes take effect immediately (i.e., they are self-implementing) while others require the SEC to change its rules. The legislation also requires the SEC to study the requirements in Regulation S-K for all issuers, report to Congress with recommendations and propose rules to modernize and simplify these requirements.

    20 November 2015

    Comment Letter - Regulation S-X requirements for other entities
    In our comment letter, we responded to the SEC’s request for feedback on requirements that registrants disclose information about other entities (e.g., acquired businesses, equity method investees and subsidiary issuers and guarantors) and said the rules are complex and require disclosures that are not as useful as they could be. We recommended simplifying the significance tests, enhancing pro forma financial information and expanding the use of abbreviated financial statements and summarized financial information to reduce the compliance costs while still providing investors with material information. We encourage others to submit comments and believe the SEC will accept and consider them after the official comment period closes on 30 November 2015.

    20 November 2015

    Comment letter - Regulation S-X requirements for registrant’s financial statements
    In our comment letter, we encouraged the SEC to streamline annual and quarterly reporting requirements, eliminate inconsistencies between the disclosure requirements of the Securities Act of 1933 and Exchange Act of 1934 and coordinate with the FASB to eliminate duplicative disclosure requirements.

    20 November 2015

    To the Point - Our recommendations for changing Regulation S-X disclosures about entities other than the registrant
    Our To the Point publication summarizes our recommendations in comment letters to the SEC on how it can enhance the effectiveness of disclosures required by Regulation S-X.

    5 November 2015

    To the Point - SEC adopts crowdfunding rules
    The SEC approved final rules that will allow certain US private companies to raise up to $1 million in a 12-month period from potentially large pools of investors over the internet. The rule limits the total value of crowdfunding securities an investor can purchase in a 12-month period to $2,000 to $100,000, depending on the investor’s annual income and net worth, and requires that securities be sold through SEC-registered intermediaries. With these rules, which will be effective 180 days after publication in the Federal Register, the SEC has completed all major rulemaking mandated by the Jumpstart Our Business Startups Act.

    7 October 2015

    Technical Line - IPO financial statement accounting and disclosure considerations
    Initial public offering (IPO) activity has increased in recent years, and the vast majority of new public companies are taking advantage of the various relief provided by the Jumpstart Our Business Startups Act. Before submitting an IPO registration statement to the SEC, companies have to consider many requirements that didn’t apply to them as private companies. We have updated our Technical Line to discuss the unique accounting and disclosure matters companies must address when preparing financial statements for their IPO registration statement.

    29 September 2015

    To the Point - SEC proposes liquidity risk rules for mutual funds and ETFs
    The SEC proposed requiring that all open-end mutual funds (excluding money market funds) and exchange-traded funds implement a liquidity risk management program and giving mutual funds the option to use swing pricing to adjust their net asset value for costs associated with satisfying requests for shareholder purchases or redemptions in certain circumstances.

    24 September 2015

    SEC Comments and Trends - September 2015
    Our 2015 edition of SEC Comments and Trends provides an in-depth discussion of SEC staff focus areas in its review of public filings and information about comments that are unique to certain industries, initial public offering registration statements and foreign private issuers. Our publication is designed to help you understand what the staff is focusing on in its comments as well as best practices for responding to comment letters as you plan for the year-end reporting season.

    6 August 2015

    To the Point - SEC finalizes ‘pay ratio’ rule
    As mandated by the Dodd-Frank Act, the SEC approved the final rule that requires most registrants to calculate and disclose the ratio of their principal executive officer’s total annual compensation to the total annual compensation of their median employee (the pay ratio). The rule mostly follows the SEC’s proposal from September 2013 but provides companies additional flexibility in determining the pay ratio. Registrants will be required to make pay ratio disclosures for their first fiscal year beginning on or after 1 January 2017.

    26 March 2015

    To the Point - SEC adopts 'Regulation A+' to expand exempt offerings
    The SEC adopted amendments to allow private companies to make exempt public offerings under Regulation A of up to $50 million of securities within a 12-month period. The rules, required by the Jumpstart Our Business Startups Act, establish two tiers of offerings with different requirements.

    4 September 2013

    Technical Line - How to apply S-X Rule 3-14 to real estate acquisitions
    The SEC staff in the Division of Corporation Finance recently revised its guidance on the S-X Rule 3-14 reporting requirements for acquisitions of real estate operations and probable acquisitions. Application of the rule has been subject to various interpretations by the SEC staff, preparers and their advisers over the years. Our Technical Line describes the staff’s revisions and provides information to help registrants contemplating real estate acquisitions or initial SEC registrations of real estate investment trusts interpret and apply the rule.

    22 August 2013

    Technical Line - Movin’ on up to accelerated filer status: You’ll need an audit of ICFR for this year
    With the increase in equity values in 2013, many non-accelerated filers will be required to transition to accelerated filer status in their upcoming Form 10-K. In addition to preparing for the transition to larger company reporting timelines and disclosures, these registrants must obtain auditor attestation as to the effectiveness of their internal control over financial reporting (ICFR) under Section 404(b) of the Sarbanes-Oxley Act. Our Technical Line publication focuses on the transition from a filer status that allowed a Section 404(b) exemption and the timing of compliance with Section 404(b).

    20 October 2011

    To the Point - SEC staff issues guidance on cybersecurity disclosures
    In response to an increase in the frequency and severity of cyber attacks and breaches, the SEC staff provided a framework for registrants to consider in evaluating whether to disclose information about risks and incidents involving cybersecurity. Our To the Point discusses the SEC guidance on cybersecurity disclosures.