Headline Speeches From AICPA SEC Conference

Dec. 13, 2013


The three-day 2013 American Institute of CPAs National Conference on Current SEC and PCAOB Developments concluded on Dec. 11. The speaker lineup was the traditional cast: chairs from the Public Company Accounting Oversight Board (PCAOB), Financial Accounting Standards Board (FASB), and International Accounting Standards Board (IASB); the Securities and Exchange Commission (SEC) chief accountant; and other representatives from the SEC, PCAOB, and FASB.

Several themes emerged from this year’s conference: the need for simplification in accounting standards, increased transparency for users, and continued improvement to internal control over financial reporting. The following are notable messages from many of the headliners and links to their speeches.

From the SEC

Paul Beswick
Chief Accountant, Office of the Chief Accountant (OCA)
In his remarks, Paul Beswick addressed several “big-picture” issues, including the FASB’s outreach process to investors and the need for simplification in accounting standards. He also discussed the SEC’s oversight (as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act) over municipal advisers and offered his observations on the valuation profession, audit committees and fees, auditor independence, and internal control over financial reporting.

Brian T. Croteau
Deputy Chief Accountant, Office of the Chief Accountant
Brian Croteau, as the deputy of the OCA’s Professional Practice Group, covered matters relating to the external auditor in his remarks. Topics he addressed include auditor independence and objectivity, PCAOB standard setting, and SEC enforcement cases, including one related to disclosure controls and procedures. He also covered management’s evaluation of internal control over financial reporting, requirements for broker-dealers, and crowdfunding.

Brian Croteau: SEC has not set a date certain for adoption of new COSO framework. But companies need to disclose which framework using.
– Crowe tweeted comment from the conference

Julie A. Erhardt
Deputy Chief Accountant, Office of the Chief Accountant
Julie Erhardt during her remarks shared her observations related to international financial reporting, providing her insights about non-U.S. capital markets.

From the PCAOB

James R. Doty
Chairman
In his remarks, James Doty focused on enhancing capital formation, investor protection, and the economy. He described how economic theory, analysis, and tools can be used to enhance the effectiveness of PCAOB programs. He also shared the ways the PCAOB seeks to make inspection reports more useful to markets and addressed PCAOB standard setting, focusing on three major projects: auditing related-party transactions, the auditor’s reporting model, and audit transparency.

Doty: tort reform not required for expansion of auditors' reporting responsibilities

PCAOB chair: new division will study the role of the auditor in the capital markets

Jay Hanson, PCAOB [board member]: Mandatory firm rotation is not on the table for us at this point
– Crowe tweeted comments from the conference

Martin Baumann
Chief Auditor
Martin Baumann provided an update on PCAOB standard setting during his remarks. He led with a discussion of the PCAOB proposal to enhance the auditor’s report and then turned to audits of broker-dealers, related-party transactions, using the work of specialists and other auditors, going concern, and a few other projects on the PCAOB agenda. Consistent with a major theme throughout the conference, he closed with comments on internal control over financial reporting.


From the FASB and IASB

Heads of FASB and IASB on future convergence: "great minds think alike" versus "it takes 2 to tango"
– Crowe tweeted comment from the conference

Russell Golden
Chairman, FASB
Presenting at this conference for the first time as the new FASB chair, Russell Golden offered several big-picture observations during his remarks. He notes a need for the FASB to evaluate its agenda based on three broad categories. The first category is foundational projects, which would include concept statements and disclosure framework. The second category is transparency, which would include evaluating existing standards and emerging trends to consider whether and where U.S. generally accepted accounting principles (GAAP) can and should be improved. The third category focuses on how to reduce complexity and promote simplification in U.S. GAAP.

FASB chair Russ Golden seeks to tackle complexity in accounting standards, cites density in US GAAP as a primary culprit

Russ Golden: we need improvement for all stakeholders, not just private company stakeholders; mentions addition of goodwill impairment as example

For private companies: according to Sue Cosper, the FASB expects to issue final standards on accounting for goodwill and interest rate swaps in mid-Jan
– Crowe tweeted comments from the conference

Hans Hoogervorst
Chairman, IASB
Consistent with Hans Hoogervorst’s views expressed at last year’s conference, he shared his perspective on why International Financial Reporting Standards (IFRS) are important to the U.S. His remarks included observations on the cost of switching to IFRS as well as milestones the IASB has accomplished this year.

IASB chair Hans Hoogervorst reminds audience IASB founded in Washington by Arthur Levitt's SEC

IASB chair: $5 trillion of market cap of 450 non-US companies registered in US using IFRS

Hoogervorst: adopting IFRS is "enlightened self-interest" of US
– Crowe tweeted comments from the conference

From the Center for Audit Quality (CAQ)

Cynthia Fornelli
Executive Director
During her remarks, Cynthia Fornelli discussed the positive results of “The CAQ’s 7th Annual Main Street Investor Survey,” which measures four key confidence measures pertaining to capital markets. She also discussed initiatives underway by the CAQ including anti-fraud initiatives and the recently issued, “Enhancing the Audit Committee Report: A Call to Action,” which encourages audit committees to increase the effectiveness of their disclosures ahead of the 2014 proxy season.



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