What Keeps The SEC Busy - 2010: The American Institute of Certified Public Accountants held its annual “Current SEC & PCAOB Developments Conference” in Washington, DC last week, including speakers from the SEC, the FASB and the PCAOB. Accountants from all parts of America and the economy gather each year to grab year-end financial reporting advice from the SEC’s staff. Despite a still-shaky economy, the conference attendance was still well over 2,000. That’s a lot of accountants and auditors.
Those auditors will soon be combing through client accounting records as gatekeepers in the whole financial reporting process. Time is always precious, but more so when there are reporting deadlines to be met. Auditors don’t want to waste their time - or their client’s time - arguing over a questionable accounting treatment if the SEC has already addressed it sometime during this conference. That’s one reason this conference is so well-attended. (It doesn’t hurt that it provides a huge dollop of required continuing professional education, either.) The conference provides three days’ worth of reminders for smart auditors who incorporate them into their audit plans.
Why should investors care? Forewarned is forearmed. Investors would do well to understand issues covered at this conference as well because the SEC staff sees financial statements during their review process well before investors read annual reports. What curious investor wouldn’t want to know the SEC staff’s gripes with current reporting? The comments of these staff persons don’t predict accounting meltdowns in the making, but their comments should remind investors that firms don’t always apply generally accepted accounting principles correctly - unintentionally or not. If there’s a later revision to issued financial statements, that might be enough of a reason for investors to care about “what kept the SEC busy.”