AccountingLink

    Comment Letters

    31 August 2017

    Comment Letter - FASB proposal for targeted improvements to related party guidance for Variable Interest Entities (VIE)
    In our comment letter, we support the FASB’s objective of reducing complexity when applying the variable interest entity (VIE) guidance, but recommend they pursue development of a single comprehensive consolidation model. To the extent they move forward with the targeted improvements, we believe the FASB should provide additional guidance to clarify the current model, which would reduce the cost and complexity for all companies. Further, we support the proposed changes in the determination of whether fees paid to decision makers or service providers are a variable interest.

    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.

    1 June 2017

    Comment letter - FASB proposal to simplify the accounting for share-based payments to nonemployees
    In our comment letter, we support the FASB’s efforts to reduce the cost and complexity of accounting for share-based payments to nonemployees by aligning it, with certain exceptions, with the accounting for share-based payments to employees. In addition, we recommend that the Board broaden the definition of an employee, simplify the proposed transition and permit the use of the expected term when valuing certain nonemployee awards.

    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.

    5 May 2017

    Comment Letter - FASB proposal to simplify the balance sheet classification of debt
    In our comment letter, we support the FASB’s efforts to reduce the cost and complexity of determining whether debt should be classified as current or noncurrent on a classified balance sheet by replacing today’s rules-based guidance with a principles-based approach. While we also support the FASB’s proposed exception for certain waivers of covenant violations received after the balance sheet date but before the financial statements are issued, we recommend that the FASB clarify the proposed principle by requiring classification to be based on whether current assets are needed to settle the liability.

    27 March 2017

    Comment Letter - FASB proposed changes to disclosure requirement for inventory
    In our comment letter, we supported the FASB’s disclosure framework project and its objective to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by US GAAP that is most important to users of each entity’s financial statements. However, we asked the FASB to provide more details about the input received from users, particularly users of other than public business entities’ financial statements, and how any expanded disclosures would affect their behavior.

    7 February 2017

    Comment Letter - FASB proposal on accounting for instruments with down round features
    In our comment letter, we support the FASB’s objective to reduce the cost and complexity of accounting for certain financial instruments with down round features, and we believe the proposal would meet that objective by requiring fewer equity-linked financial instruments (or embedded features) with down round features that have to be accounted for at fair value. However, we believe the proposed guidance could cause confusion about whether a convertible instrument with an adjustment provision that could result in the recognition of a contingent beneficial conversion feature (BCF) would be in the scope of the proposed recognition and measurement guidance for down round features (i.e., ASC 480-20). Therefore, we recommend that the FASB clarify the proposed guidance on convertible instruments with down round features that are also subject to the contingent BCF guidance in ASC 470-20. We do not believe these instruments should be in the scope of ASC 480-20, because applying both the guidance in ASC 480-20 and the contingent BCF guidance in ASC 470-20 would be too complex.

    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.

    6 January 2017

    Comment Letter - FASB proposal on the scope of modification accounting in the stock compensation guidance
    In our comment letter, we support the Board’s objective to reduce the cost and complexity of applying modification accounting and believe many of the proposed amendments would meet that objective. However, we believe the FASB should include additional guidance about how the amendments would be operationalized.

    14 December 2016

    Comment Letter - FASB’s long-duration contracts proposal for insurers
    In our comment letter, we support the Board’s objective to simplify and enhance the financial reporting requirements for long-duration contracts issued by insurers and believe many of the proposed amendments would meet that objective. However, we believe the FASB should reconsider certain aspects of the proposal and provide additional guidance or clarification in some places.

    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.

    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

    Comment Letter - FASB proposal on premium amortization on purchased callable debt securities
    In our comment letter, we supported the FASB’s proposal to shorten the amortization period for callable debt securities purchased at a premium. However, we recommended that the FASB clarify whether the proposed guidance would apply to callable instruments that do not have definitive call dates.

    3 November 2016

    Comment Letter - FASB’s hedge accounting proposal
    In our comment letter, we applaud the FASB for addressing many of the concerns raised by preparers, users and other stakeholders about the complexity of today’s hedge accounting model and the restrictions it imposes. Overall, we agree that the proposed amendments would better portray the economics of an entity’s risk management activities in its financial statements and simplify the application of hedge accounting in certain situations. However, we believe the FASB should reconsider certain aspects of the proposal and provide additional guidance or clarification in some places.

    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.

    24 October 2016

    Comment Letter - FASB’s invitation to comment, Agenda consultation
    In our comment letter, we commend the FASB for its thorough and thoughtful approach to deciding which financial reporting issues to add to its future agenda. We agree that now that the Board has completed many of its major projects, it has an opportunity to consider its direction for the next few years. However, we do not believe that now is the time for the FASB to begin actively working on any new major projects, other than continuing to conduct research for future ones. We are concerned that, given the volume of major new standards entities will have to implement over the next few years, it would be difficult for preparers, users, auditors and regulators to continue monitoring new standard-setting initiatives while effectively managing changes resulting from the major new standards.

    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.

    4 October 2016

    Comment letter - FASB’s proposed additional technical corrections and improvements to the new revenue standard
    In our comment letter, we support the FASB’s objective to address additional feedback received from stakeholders and to make other improvements to its new revenue standard. Overall, we believe that the proposed amendments would address the additional concerns raised by constituents, provide more clarity and improve consistency in application. We also recommend additional clarifications.

    3 October 2016

    Comment Letter - FASB’s proposal to retain the consolidation guidance for NFP general partners in for-profit limited partnerships
    In our comment letter, we supported the FASB’s proposal to retain the consolidation guidance in ASC 810-20 requiring a not-for-profit entity that is a general partner in a for-profit limited partnership or similar entity to presume that it controls the entity, unless that presumption can be overcome. We also supported the FASB’s proposed clarification that not-for-profit entities (other than business-oriented health care entities) with investments in certain for-profit entities may continue to elect to measure those investments at fair value, and we offered suggestions on how the FASB could further clarify its intent.

    30 September 2016

    Comment Letter - FASB proposed changes to disclosure requirement for income taxes
    In our comment letter, we supported the FASB’s effort to improve the effectiveness of income tax disclosures, particularly incorporating disclosures required by the Securities and Exchange Commission into US GAAP. However, we asked the FASB to provide more details about the input received from users on expanding the disclosure requirements as we believe that would help other constituents understand how the proposal meets user needs. In addition, we expressed concerns about the proposed requirements to disclose agreements with a government and the future effects of tax law changes, and we recommended that the Board clarify certain aspects of the proposed requirements to promote consistency and make the disclosures as useful as possible.

    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).

    6 September 2016

    Comment Letter - ASB’s going concern proposal
    In our comment letter, we support the issuance of the Proposed Statement on Auditing Standards, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, to promote consistency between the auditing standards and ASU 2014-15, Presentation of Financial Statements – Going Concern, which will require management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern. However, we disagree with the proposed requirement for the auditor to make inquiries of management about its knowledge of conditions or events beyond the period of management’s evaluation that raise substantial doubt about the entity’s ability to continue as a going concern.

    15 August 2016

    Comment letter - PCAOB’s reproposal on the auditor reporting model
    In our comment letter, we supported the PCAOB’s efforts to make the auditor’s report more informative and relevant for investors and other users of the financial statements. However, we offered some suggestions to clarify the definition of critical audit matters and the related disclosure requirements to reduce the instances where the auditor would provide original information about the company. We also raised some concerns related to increased auditor liability and recommended that the PCAOB eliminate the reproposed requirement to disclose auditor tenure in the auditor’s report.

    5 August 2016

    Comment letter - FASB proposal on clarifying the scope of asset derecognition guidance and accounting for partial sales of nonfinancial assets
    In our comment letter, we supported the FASB’s objective to clarify the guidance on how to account for derecognition of nonfinancial assets and in substance nonfinancial assets. We believe the proposed ASU would reduce the cost and complexity of accounting for the derecognition of nonfinancial assets by aligning it further with the accounting for the derecognition of a business. Further, the proposed ASU would result in the remeasurement of any retained noncontrolling interest to fair value, which may lead to a higher risk of future impairment and may raise further questions regarding the technical merits of recording gains on retained interests.

    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.

    25 July 2016

    Comment Letter - FASB proposal on evaluating interests held under common control in the Variable Interest Entity (VIE) Model
    In our comment letter, we supported the FASB’s objective of changing how a single decision maker or service provider considers indirect interests when applying the consolidation guidance on determining whether it is the primary beneficiary of a VIE under the VIE model. However, we raised concerns about the clarity of the VIE model, particularly the primary beneficiary guidance, when the evaluation includes entities under common control.

    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.

    30 June 2016

    Comment letter - FASB proposal on goodwill impairment
    In our comment letter, we supported the FASB’s objective of simplifying the accounting for goodwill impairment and said we believe the proposed amendments would reduce the complexity of applying the goodwill impairment assessment. However, we recommended that the Board consider certain changes in the proposal. We also said that we believe the Board should continue to simplify the subsequent accounting for goodwill in the next phase of its project and that any future amendments should be practical in nature.

    29 June 2016

    Comment Letter - FASB proposal on technical corrections and improvements
    In our comment letter on the Proposed Accounting Standards Update, Technical Corrections and Improvements, we agree that for the most part, the proposed changes would clarify the Accounting Standards Codification, correct unintended application of guidance or make minor improvements to the Codification that would not be expected to have a significant effect on current accounting practice or create a significant administrative cost for most entities. However, we express concerns about certain of the proposed amendments

    29 June 2016

    Comment letter - FASB proposal on technical corrections and improvements to its revenue standard
    In our comment letter, we support the FASB’s proposal to address feedback received from stakeholders and to make other improvements to its new revenue standard. Overall, we believe that the proposed amendments would address many of the concerns raised by constituents, provide additional clarity and improve consistency in application. We also recommend additional clarifications.

    25 April 2016

    Comment letter - FASB proposal on changes to disclosure requirements for defined benefit plans
    In our comment letter, we support the proposed elimination of certain disclosure requirements but have concerns about how entities would apply the materiality assessments under the FASB’s proposed ASU on materiality. We also are concerned that certain proposed disclosure requirements, together with current ones required by ASC 715, Compensation – Retirement Benefits, could further reduce disclosure effectiveness.

    25 April 2016

    Comment letter - FASB proposal on changes to the reporting of net periodic pension cost and net periodic postretirement benefit cost
    In our comment letter, we said we agree that only the service cost component of net periodic pension cost and net periodic postretirement benefit cost should be eligible for capitalization in assets. We also believe that the prior service cost or credit component should be presented in the same financial statement line item as the current service cost component within operating income. However, we have concerns about the proposed amendment that would require entities to present the other components of net periodic pension cost and net periodic postretirement benefit cost outside a measure of operations.

    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.

    29 February 2016

    Comment letter - FASB proposal on fair value measurement disclosures
    In our comment letter, we support both the FASB’s objective to improve the effectiveness of disclosures and the proposed elimination of certain fair value disclosure requirements, including the relief that would be provided to private companies. However, we highlight the cost of implementing some of the additional requirements the FASB proposed, including the disclosures of the amount of changes in unrealized gains and losses for recurring Level 1 and Level 2 measurements disaggregated by class.

    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.

    10 February 2016

    Comment Letter - FASB proposal on disclosures of government assistance
    In our comment letter, we supported the FASB’s objective of improving the reporting and disclosure of certain government assistance arrangements, but we did not agree that the approach taken by the Board would meet that objective. We believe that the FASB should first develop recognition and measurement guidance for government assistance arrangements and then consider disclosure requirements for arrangements within the scope of that guidance. If the Board believes that additional disclosures should be required for arrangements accounted for under other topics in the Accounting Standards Codification, we believe that the Board should amend the disclosure requirements in those topics to specifically address those matters.

    21 January 2016

    Comment Letter - FASB proposal on the definition of a business
    In our comment letter, we supported the FASB’s objective of helping entities evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses and said we believe the proposed amendments would simplify the evaluation. However, we recommended that the Board consider amending certain language and clarifying some of the examples in the proposal.

    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.

    23 December 2015

    Comment Letter - Amendments to conceptual framework for financial reporting, chapter 3: qualitative characteristics of useful financial information
    In our comment letters, we continue to support the objective of the FASB in its disclosure framework project to improve disclosure effectiveness in the notes to the financial statements. We supported the FASB’s proposal to align its definition of materiality in the Conceptual Framework with that of the SEC and the PCAOB. However, we have concerns that the proposed evaluation of materiality of omitted disclosures is not sufficiently clear to be applied consistently by preparers, auditors and regulators.

    23 December 2015

    Comment Letter - Assessing whether disclosures are material
    In our comment letter, we continue to support the objective of the FASB in its disclosure framework project to improve disclosure effectiveness in the notes to the financial statements. We supported the FASB’s proposal to align its definition of materiality in the Conceptual Framework with that of the SEC and the PCAOB. However, we are concerned that focusing on materiality solely as a legal concept could lead to materiality decisions becoming legal determinations, when in fact they should be accounting determinations.

    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.

    16 November 2015

    Comment Letter - FASB proposal on effective date and transition guidance for existing PCC alternatives
    In our comment letter, we said we continue to support providing relief to private companies under US GAAP and believe the proposal would meet that objective by allowing private companies to forgo a preferability assessment the first time they adopt an existing Private Company Council (PCC) alternative. However, we do not believe it is necessary to add a provision indicating that private companies can forgo a preferability assessment the first time they elect to apply the simplified hedge accounting approach. We also support extending the transition guidance in the PCC alternatives indefinitely.

    16 November 2015

    Comment Letter - FASB proposal on narrow scope improvements and practical expedients for its revenue standard
    In our comment letter, we supported the FASB’s proposal to clarify the guidance in its new revenue standard on collectibility, presentation of sales and similar taxes, noncash consideration and transition. Overall, we believe that the proposed clarifications would improve consistency and, in many cases, provide a practical approach to applying the new standard. We also recommended additional clarifications.

    15 October 2015

    Comment Letter - FASB proposal to clarify the principal versus agent guidance in the new revenue standard
    In our comment letter, we supported the FASB’s proposal to clarify the principal versus agent guidance in its new revenue standard and further supported the decision by the FASB and the IASB to propose converged amendments to this guidance. Overall, we believe that the proposed amendments would enhance the operability of the standard and result in more consistent application across entities, although significant judgment would still be required. We also recommended additional clarifications.

    29 September 2015

    Comment Letter - AICPA proposed statement on forming an opinion and reporting on financial statements
    In our comment letter, we support the proposed Statement on Auditing Standards. We believe the amendments will improve consistency in reporting when an audit is conducted in accordance with both GAAS and the standards of the PCAOB and the audit is not within the jurisdiction of the PCAOB.

    28 September 2015

    Comment Letter - PCAOB concept release on audit quality indicators
    In our comment letter, we supported the PCAOB’s efforts to develop relevant audit quality indicators (AQIs) that could provide stakeholders, such as audit committees, investors, audit firms and regulators, with additional perspective on matters that affect audit quality. We believe context is critical to understanding and interpreting AQIs to avoid misperceptions that might lead to unintended consequences. Therefore, we believe the PCAOB should allow audit firms and audit committees to continue to voluntarily develop AQIs and should not require a particular set of AQIs and a disclosure approach.

    15 September 2015

    Comment Letter - SEC proposed clawback rule
    In our comment letter, we asked the SEC to consider clarifying the scope of restatements that would trigger a clawback of excess incentive-based compensation to executives, as well as when the three-year look-back period would be triggered. We also suggested that the SEC not require an issuer to disclose how it arrived at a conclusion that errors were immaterial (and thus did not trigger a clawback). Finally, we asked the SEC to provide guidance on applying the clawback provisions when a restatement does not affect the stock price.

    8 September 2015

    Comment Letter - SEC concept release on audit committee disclosures
    In our comment letter, we said that allowing audit committees to respond to investor needs and the evolving corporate governance landscape is preferable to developing prescriptive rules at this time. We included results from our research showing a steady increase in the depth and scope of voluntary audit committee-related disclosures by Fortune 100 companies since the 2012 proxy season. We suggested that if the SEC decides to take further action, it should clarify the purpose and objectives of the audit committee report in a way that is broad and principles-based. We also discussed fundamental disclosure objectives and identified opportunities to strengthen audit committee disclosures under current rules.