Postcard from the AICPA SEC Conference - Day 1

Greetings from the AICPA Conference on Current SEC and PCAOB Developments!  The conference kicked-off on Monday, December 4 in Washington, D.C. 

The conference kicked-off with Kimberly Ellison-Taylor, Chair of the American Institute of Certified Public Accountants (AICPA), giving an update on the developments and areas of focus of the AICPA, which include the development of guidance related to cybersecurity, cryptocurrency and the use of data analytics in the audit process.  To show just how important cybersecurity has become, she stated that the average cost of a data breach has risen to approximately $3.6 million. Ms. Ellison- Taylor was followed by Cynthia Fornelli, Executive Director of the Center for Audit Quality (CAQ), who provided commentary regarding the advocacy efforts, research and resources provided by the CAQ.  Ms. Fornelli stressed how important it is for companies to have an involved audit committee and said that she was pleased with the improved transparency of audit committees as detailed in the CAQ’s Audit Committee Transparency Barometer.

The conference transitioned to an update from the U.S. Securities and Exchange Commission (SEC), which included a conversation with Jay Clayton, Chairman of the SEC, Wesley Bricker, Chief Accountant of the SEC, and additional SEC staff.  Mr. Clayton noted the importance of having a strong public market that provides “main street investors” with an opportunity to participate in a market at a reasonable cost.  He also stressed the importance of having regulations that promote thoughtful and customized disclosures rather than boilerplate disclosures.  The rest of the SEC staff discussed some hot topics that include revenue recognition, leases, credit losses, internal control over financial reporting, international issues, auditor independence, and enforcement issues.

Day 1 also included a keynote address from James Doty, Chairman of the Public Company Accounting Oversight Board (PCAOB).  Mr. Doty discussed the upcoming changes to the audit report and noted that the PCAOB will soon be issuing staff guidance related to the new report and its changes. He also addressed the continued focus of the PCAOB on the use of other auditors, particularly those outside the United States.

The afternoon session included three panel discussions.  The first panel discussion covered the SEC comment letter process and trends in comment letter topics.  The panel noted that comment letter volume has decreased over the years as companies have become more familiar with the process and initial public offering activity has slowed.  The panel noted that non-GAAP measures will continue to be a focus, but that issuers have made significant improvements in this area.  The panel also speculated that income tax law changes, cybersecurity, pay ratio disclosures, and revenue recognition will be prevalent comment letter topics in future filings.  Of interesting note is the fact that while the SEC doesn’t have Facebook access, they do have an online presence and perform reviews of various forms of digital media. The second panel discussion included an in-depth technical review of several complex accounting areas.  This included topics such as consolidation, segments and goodwill impairment testing, credit losses, and hedge accounting.  The final panel discussion started with a polling question that showed that 60% of the conference attendees felt that current disclosure requirements were too burdensome.  The panel then discussed their thoughts on the current state of disclosure requirements and where future requirements may take the industry.

Stay tuned for more as the conference continues!

This article was co-written by Ryan Deatrick and Matt McNeal.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2022 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Greenhouse Gas Emissions, Scope Levels, & The Future of Disclosures
E.U. Environmental, Social, and Governance Proposals under CSRD and their Impact on U.S. Companies
SEC Outlines Greenhouse Gas Assurance Timeline
SEC’s New Proposed Environmental Disclosures
Proposed Changes to Goodwill Topic 350
Data and Technology Research Project Spotlight
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.