By George Wilson
In late December the SEC issued several pronouncements that could be relevant for year-end reporting.
First, on December 30, 2019 the SEC issued this Statement on Role of Audit Committees in Financial Reporting and Key Reminders Regarding Oversight Responsibilities from Chair Jay Clayton, Chief Accountant Teotia and CorpFin Director Hinman. The Statement provides “observations and reminders on a number of potential areas of focus for audit committees”. Areas addressed in the statement include:
Tone at the top
Generally accepted accounting principles
Communications to the audit committee from the independent auditor
Reference rate reform
Critical audit matters
The Statement concludes with these words:
“The strength of our capital markets, and the confidence of investors in our markets, is driven by the continued quality and reliability of financial reporting. Independent audit committees perform a vital role in financial reporting and have a significant oversight responsibility in connection with the preparation and review of the financial information our investors and markets expect.”
Second, on December 19, 2019, CorpFin issued two new Disclosure Guidance Topics.
The first, CF Disclosure Guidance: Topic No. 7 - Confidential Treatment Applications Submitted Pursuant to Rules 406 and 24b-2 addresses “how and what to submit when filing an application objecting to public release of information otherwise required to be filed under the Securities Act and the Securities Exchange Act”. The new Disclosure Guidance topic supersedes Staff Legal Bulletins 1 and 1A.
The second, CF Disclosure Guidance: Topic No. 8 - Intellectual Property and Technology Risks Associated with International Business Operations outlines CorpFin’s “views regarding disclosure obligations that companies should consider with respect to intellectual property and technology risks that may occur when they engage in international operations.”
As always, your thoughts and comments are welcome!