For the second year running, SEC activities during 2013 were dominated by its efforts to issue rules required by two major pieces of recent legislation:
Audit, Compliance and Risk Blog
SEC activities during 2012 have been dominated by its efforts to issue rules required by two major pieces of recent legislation:
This is the second of two blog articles on 2012 changes in the literature frequently used by accountants. Previously, I covered accounting developments in the United States and internationally. This article covers developments affecting companies (registrants) subject to Securities and Exchange Commission (SEC) oversight and auditing developments.
Ever since the passage of the Sarbanes-Oxley Act of 2002 (SOX), the concept of internal control over financial reporting has taken on a new meaning. The U.S. Congress passed this legislation in part because of the failure of certain large companies, notably Enron and WorldCom, which met their demise in part because of real or perceived weaknesses in company internal control and less than adequate corporate governance. SOX reinforces the concept that company management is responsible for establishing and maintaining an adequate internal control structure and robust procedures for financial reporting.
As discussed in my prior blog item, the staff in the Securities and Exchange Commission (SEC) did not make a recommendation to the commissioners of the SEC on whether U.S. registrants should be required or permitted to use International Financial Reporting Standards (IFRS). I termed it a “punt.” On October 22, 2012, the IFRS Foundation staff published an 84-page analysis of this SEC staff report. In the press release announcing issuance of the IFRS Foundation staff report, Trustee Chairman Michel Prada observed that there are “no insurmountable obstacles for adoption of IFRS by the United States.”
Latest Congressional Action on Securities | JOBS Act Loosens Regulation on Smaller Companies Securities requirements in the United States tend to ebb and flow, so that a period of increasing restrictions is followed by a decade of loosening restrictions. Congress propels these changes as lawmakers respond to market needs and political tides. April 2012 marks the latest change, as the imaginatively named Jumpstart Our Business Startups Act (JOBS) introduces legislation that allows small companies to grow before having to register securities or stage an initial public offering (IPO). The JOBS Act also reduces reporting requirements for up to five years after an IPO. These opportunities include: