Accounting- and auditing-related standard-setting activity has heated up recently. Here’s a rundown of recent rulemaking from the Financial Accounting Standards Board, the Securities and Exchange Commission, and the Public Company Accounting Oversight Board, worth taking a look at as we approach the Summer of ’16.
Final and near-final rulesThe FASB has published three final Accounting Standards Updates in the past month, all related to revenue recognition:
On May 10, the PCAOB announced that its final rule requiring disclosure of the name of the audit engagement partner and certain other firms involved in an audit had received the approval of the SEC. The provision in the rule pertaining to disclosure of the name of the engagement partner (on PCAOB Form AP) becomes effective for all public company audits issued on or after Jan. 31, 2017. The provision pertaining to disclosure of certain other participants in the audit is effecive for all public company audits issued on or after June 17, 2017. See:
The PCAOB, having considered comments on its original proposal on the auditor’s reporting model, recently issued a revised proposal for public comment. A central feature of the reproposal is that the auditor’s report would still follow what has been described as the traditional “pass-fail” model (i.e., it would provide an unqualified or “clean’ opinion vs. a qualified audit opinion), but a major change would be the auditor’s discussion of “critical audit matters,” akin to the issuer’s discussion of critical accounting policies. See:
The SEC has a number of proposals currently out for public comment. The most recent item, pertaining to incentive compensation for financial institutions, is a joint proposal issued by the SEC and the federal banking agencies. The item further below, a Concept Release on Reg S-K, is part of the SEC’s project on disclosure effectiveness.