Volume 23, No. 13: What Keeps SEC Busy – 2015
The American Institute of Certified Public Accountants held its annual “Current SEC & PCAOB Developments Conference” in Washington, DC last week. Speakers came from all of the major accounting agencies or standard-setters: the SEC, the PCAOB, the FASB, and the IASB. The December “Woodstock for accountants” drew over 2,000 attendees this year.
When 2015 arrives in a couple of short weeks, those wild corporate Woodstockers will be hustling to complete their year-end duties on annual 10-K filings. The outside auditors then perform their inside audit work, resulting in a thumbs-up or a (rare) thumbs-down on what investors will see from the outside. Accountants and auditors use the conference to learn what pitfalls might lie before them, in terms of issues that concern the SEC. The conference is an early warning system for accountants and auditors alike. Understanding the SEC’s priorities lets them reinforce their reporting and auditing efforts where they’re most needed, and perhaps allow them to escape at least some SEC review comments.
Investors can benefit from this conference, too. They’re paid to be a skeptical lot, but you have to know something before you can be skeptical – and topics covered in this conference help build their knowledge base. While there were some technical issues that should pique the interest of investors, they might find the SEC’s growing attention to “disclosure effectiveness” and the FASB’s “simplification efforts” to be unsettling. As it was in 2014, it seemed that standard setters and regulators are growing more concerned with the issuer effects of standards and disclosures rather than their usefulness to investors. And once again, “what keeps the SEC busy” over the next twelve months might be more about lightening corporate workloads than improving investor information.