What Keeps The SEC Busy - 2012: The American Institute of Certified Public Accountants held its annual "Current SEC & PCAOB Developments Conference" in Washington, DC last week, featuring speakers from all of the accounting bodies that matter: the SEC, the FASB, the IASB and the PCAOB. It may well be the world’s biggest Christmas party for accountants, who come from all over the country to hear what the representatives of these regulators and standard-setters have on their minds about financial reporting in the current environment.
Just after 2012 begins, the preparer types at the conference will be putting together their firms’ annual 10-K filing - the thickest, juiciest shareholder communications package of the year. (Most often, it ends up being an annual exercise in compliance.) On their heels will come the auditors, paying attention to the way financial information has been compiled and presented. Both preparer-type accountants and auditors from public accounting firms invest their precious time in this conference to avoid wasting time later. If the SEC and PCAOB tell accountants of all stripes of the reporting problems they’re seeing, why ignore them? Forewarned is forearmed; understand the regulators’ concerns now, and maybe you’ll avoid comments and hung-up filings later when it’s crunch time. The conference fills up three days with financial statement intelligence for auditors and preparers to absorb - if they want to.
Investors can garner insights from this conference, too. Financial reporting problems originate inside of companies and at much lower depths of transaction detail than at the 30,000 foot level view that investors get in the financial statements. The PCAOB is charged with ensuring auditors do their job at a professional level for the benefit of investors; their overseer, the SEC, is charged with ensuring that investors receive fair disclosures. Skeptical investors should be curious about what accounting issues matter to an agency whose reason for being is simply, the investing public. It’s enough of a reason for investors to care about "what keeps the SEC busy."