Riveron at AICPA & CIMA Conference on Current SEC and PCAOB Developments, December 10, Washington DC.
Riveron Accounting Advisory Managing Directors Drew Niehaus, Patrick Garrett, Lara Long, Joe Haehner, and Sarah Kieffer attended day two of the AICPA & CIMA Conference on Current SEC and PCAOB Developments. There they listened to presentations by French Hill, US Congressman (AR) and Bill Hulse, US Chamber of Commerce on implications of the new administration and potential congressional clawbacks. National Accounting Firm chief accountants addressed practice issues including warrants (indexation), debt exchanges, revenue recognition, cash flows issues and consolidation; and, SEC and law firm financial attorneys addressed such issues as cybersecurity reporting protocol and robust disclosure controls and procedures.
Highlights from today:
- Latest FinREC Activities
The committee has recently completed its business combinations accounting and valuation guide with increased guidance in helping preparers identify a business combination and apply business combination accounting and accepted valuation principles. The committee also discussed updates to their 2013 cheap stock guide. The focus of the updates is to ensure that private companies are adequately considering external transactions when assessing stock grants and the potential recognition of compensation expense. The new guide is expected to be issued in 2025. - Division of Corporation Finance Updates: The Division highlighted recent areas of regulatory scrutiny, including the clarity and precision of MD&A disclosures, the proper and balanced presentation of non-GAAP financial measures, and adoption considerations for the enhanced segment reporting standard. In addition, discussions addressed the complexity of newly mandated pay-for-performance disclosures, forthcoming executive compensation clawback rules, and effective tax rate implications under global Pillar II measures. Collectively, these developments underscore the SEC staff's ongoing emphasis on investor-centric transparency, careful compliance with evolving requirements, and robust controls over the financial reporting process.
- Cybersecurity Disclosure Panel: The cybersecurity panel focused on best practices for determining incident materiality, blending both quantitative and qualitative factors. Panelists advised companies to institute solid internal controls, well-defined governance frameworks, and methodical documentation—ensuring that decision-making around cybersecurity reporting is timely, consistent, and defensible. With the SEC poised to enforce its new cybersecurity rules and requiring structured data tagging (XBRL), the panel emphasized that proactive measures and cross-functional coordination among finance, legal, and IT teams are essential for sound, investor-relevant disclosures in a rapidly changing threat landscape.
- PCAOB Developments: The PCAOB underscored notable strides in audit quality, evident in improved inspection outcomes and more timely inspection reports. Recent standard-setting achievements, including updated quality control requirements (QC 1000) and the adoption of a foundational standard (AS 1000), reflect a targeted approach to address modern risks and technologies. Moreover, the past year marked a record in enforcement actions and fines, signaling the PCAOB's commitment to rigorous oversight and heightened accountability. The board's message to firms: continuous improvement in audit execution, ethics, and skepticism are non-negotiable in safeguarding investor confidence.
- National Accounting Firm Chief Accountants' Discussion: Top technical leaders from major audit firms tackled intricate practice challenges at the forefront of financial reporting. Their dialogue examined the complexity of warrant indexation under current financial instrument rules, the EITF's forthcoming guidance on debt exchanges designed to reduce complexity, ongoing revenue recognition issues (such as contract modifications and performance obligation identification), persistent classification questions in the statement of cash flows, and the convoluted consolidation/VIE model. These perspectives offered a rare, collective window into the operational hurdles practitioners face and the subtle judgments that define today's accounting environment.
- Congressional and Policy Insights: Congressman French Hill, alongside Bill Hulse from the US Chamber of Commerce, provided forward-looking views on the potential impact of an administrative shift on financial regulation, capital formation, and the broader policy ecosystem. They explored how the new political landscape might shape the SEC's and PCAOB's agendas, influence the pace of rulemaking and oversight, and recalibrate regulatory burdens. By framing the debate around economic growth, investor protection, and sensible reporting requirements, their insights highlighted the interplay between legislation, policymaking, and the profession's strategic priorities.
Check back tomorrow for our recap of Day 3, live from Washington DC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
