Category: Accounting and Auditing

New revenue recognition standard— don’t ignore the impact on compensation

by Cydney Posner At the recent Bloomberg BNA Conference on Revenue Recognition,  a Deloitte partner observed that, to the extent that, in awarding compensation, companies use metrics that are keyed to revenue, the new revenue recognition standard could affect compensation or bonus plans because the ways of measuring and the […]

Are “other key operating metrics” the new non-GAAP financial measures?

by Cydney Posner As reported by BNA, the top accounting staff at the SEC are quite satisfied with companies’ responses to the SEC’s assault on abuses of non-GAAP financial measures. The staff’s concern was that companies’ reporting was often inappropriately painting, through the use of non-GAAP measures, healthier-than-justified pictures of […]

It’s baaaack — the Financial CHOICE Act of 2017

by Cydney Posner A draft of the Financial CHOICE Act of 2017 (fka version 2.0), a bill to create hope and opportunity for investors, consumers, and entrepreneurs — a masterpiece of acronyming — has just been released (and weighs in at 593 pages).   The bill, sponsored by Jeb Hensarling, Chair […]

SEC Chief Accountant addresses audit committee effectiveness

by Cydney Posner In a recent speech at the University of Tennessee, “Advancing the Role and Effectiveness of Audit Committees,” SEC Chief Accountant Wes Bricker discusses his recommendations for — wait for it — improving the effectiveness of audit committees.  The speech addresses issues such as diversity, work overload, tone […]

Corp Fin suggests it will take a look at non-GAAP disclosure practices in the pharmaceutical industry

by Cydney Posner Even important industry players can sometimes run up against brick walls at Corp Fin. In a recent give-and-take with the SEC, Allergan was scolded for its use of certain non-GAAP financial measures in its press releases.  While in its responses to the staff, the company cogently explained […]

KPMG surveys audit committee concerns

by Cydney Posner What are audit committee members’ greatest concerns? Audit committee members participating in KPMG’s 2017 Global Audit Committee Pulse Survey identified risk management as the biggest challenge for audit committees in 2017, with 42% of those surveyed characterizing their existing risk management programs as requiring “substantial work,” and […]

Audit committee oversight of the new revenue recognition standard: Center for Audit Quality comes to the rescue

by Cydney Posner As discussed in this PubCo post, the SEC’s Office of the Chief Accountant has continued to beat the drums to encourage companies and their audit committees to hunker down and address the impending effectiveness in 2018 of the new revenue recognition standard, particularly with respect to assessment […]

SEC Chief Accountant and staff speak at AICPA National Conference

by Cydney Posner Earlier this month, at the 2016 AICPA conference on current developments, the SEC’s Chief Accountant and several staff members of his office shared their insights on a variety of key accounting topics, among them the following:

Should non-GAAP financial measures be audited?

by Cydney Posner At a meeting yesterday of the PCAOB’s Investor Advisory Group, two working groups reported on topics that might be of particular interest: non-GAAP financial measures and enhanced audit reports.

Are stock options a counterweight to whistleblower bounties?

by Cydney Posner A new academic study, “Rank and File Employees and the Discovery of Misreporting: The Role of Stock Options,” finds that companies that flout financial reporting rules tend to grant more stock options than their peers that adhere to those rules. Moreover, the study found that violators that […]