What Keeps The SEC Busy - 2000: The American Institute of Certified Public Accountants hosts an annual December conference in Washington DC covering current SEC reporting issues. Most of the speakers are SEC staff members, holding allure for public accounting practitioners: they gain practical insights on reporting issues which have dogged the SEC for the past year. Auditors attend out of enlightened self-interest: knowledge of the issues which have pushed SEC buttons can help them avoid pitfalls in carrying out their current year audit responsibilities.
Analysts don’t perform formal audits; should they care about what troubles the SEC and interests auditors? Absolutely. What keeps the SEC busy throughout the year are issues where companies have been pushing the envelope in regard to high quality financial reporting. The issues that are discussed at the meeting are pretty well sanitized by the time analysts see them in the financial statements - but where there’s smoke, there’s fire. The SEC is usually trying to nip a particular shoddy practice in the bud, but there’s no guarantee that all of the weeds have been pulled out of the garden. Learning more about where managements have been inventive in the past can make analysts more savvy in assessing the financial reporting they see in coming months.
The following are selected highlights of the issues discussed at December’s conference by members of the SEC's Office of the Chief Accountant, the Division of Corporate Finance and others. Consider these highlights as windows on the way the corporate mind works when it wants to put on a good face.