SEC TO REFORM PUBLIC COMPANY DISCLOSURES
Washington, D.C. -- The Securities and Exchange Commission issued a staff report to Congress in late December on its disclosure rules for U.S. public companies, as part of its efforts to modernize the disclosure requirements and reduce compliance costs for emerging growth companies.
The SEC's Office of the Chief Accountant will coordinate with the Financial Accounting Standards Board to identify ways to improve the effectiveness of disclosures in corporate financial statements and to minimize duplication with other existing disclosure requirements.
The report was mandated by Congress in the Jumpstart Our Business Startups, or JOBS, Act of 2012. It offers an overview of the SEC's Regulation S-K governing public company disclosure, in addition to the staff's preliminary conclusions and recommendations.
"This report provides a framework for disclosure reform," said SEC Chair Mary Jo White in a statement. "As a next step, I have directed the staff to develop specific recommendations for updating the rules that dictate what a company must disclose in its filings. We will seek input from companies about how we can make our disclosure rules work better for them and will solicit the views of investors about what type of information they want and how it can be best presented."
Title I of the JOBS Act created a new category of issuer known as an "emerging growth company," defined as a company that had not completed its first registered sale of common equity securities on or before Dec. 8, 2011, and has total annual gross revenues of less than $1 billion during its most recently completed fiscal year.
Emerging growth companies can take advantage of a variety of scaled disclosure and other accommodations under the JOBS Act, including exemptions from or modifications to certain Regulation S-K disclosure requirements.
The SEC staff concluded that it would be important to first understand and consider the history of all the provisions in Regulation S-K and that a full review of Regulation S-K would be appropriate, since there might be simplifications, modernizations, revisions or eliminations that would be suitable for all issuers, regardless of size.
AICPA OFFERS PRACTICE AID ON AUDITS OF PRIOR PERIODS
New York -- The American Institute of CPA has published a technical practice aid to address the use of current auditing standards for audits of prior periods.
Technical Question and Answer 8100.03, part of the AICPA's series of technical practice aids, has been issued to provide non-authoritative guidance.
According to the document, an auditor may perform and report on an entity's prior-period financial statements using the clarified auditing standards even though the standards were not effective for that prior period.
The questions and answers in such documents are not sources of established authoritative principles. This material is based on selected practice matters identified by the staff of the AICPA's Technical Hotline and various other bodies within the AICPA and has not been approved, disapproved or otherwise acted upon by any senior technical committee of the institute.
SEC POSTPONES MUNICIPAL ADVISOR REGISTRATION
Washington, D.C. -- The Securities and Exchange Commission has delayed until July 1, 2014, the date on which the first set of municipal advisors will be required to register under final rules issued by the commission.
The SEC is giving market participants additional time to analyze, implement and comply with the final rules, balancing the goals of enhancing the quality of municipal securities advice and protecting investors and municipalities.
The SEC's Office of Municipal Securities also issued interpretive guidance on the municipal advisor registration rules to address questions that it received from participants. The staff guidance, in the form of answers to frequently asked questions, covers advice standard, general information exclusion and the treatment of business promotional materials used by underwriters; the request for qualifications exemption; independent municipal advisors exemption; exclusion for registered investment advisers; underwriter exclusion; issuance of municipal securities and post-issuance advice; remarketing agent services; opinions by citizens in public discourse; and the effective date of the final rules and the compliance period for using the final registration forms.
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