SEC Reporting Concerns for the Year‐End

• Date: 01 January 2015
• Published date: 01 January 2015
• DOI: http://doi.org/10.1002/jcaf.22026
• Author: Donald A. Walker

89

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22026

SEC

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Donald A. Walker Jr.

SEC Reporting Concerns for the Year-End

At this time of year, manage-

ment concerns about the activi-

ties of the U.S. Securities and

Exchange Commission (SEC)

generally center around three

themes:

1. What kinds of results are

we expecting to report to

the public and SEC in the

December annual (or quar-

terly) reports?

2. What is happening in our

business that we will dis-

close and discuss in our

Form 10-K or 10-Q?

3. What is happening in our

annual independent audit

(or quarterly review)?

Let us come back to those

questions after we look inside

the SEC to see what the SEC

staff is doing and has done

recently that might affect us.

THE SEC AT CALENDAR

YEAR-END

At calendar year-end 2014,

the SEC has finally filled all of

its major positions. A new chief

accountant, James Schnurr,

has taken his position in Octo-

ber. A new chief accountant

of the Enforcement Division,

Michael Maloney, has been

in place for nearly six months.

The major divisions of the SEC

have experienced directors in

place. The Commission has an

experienced chairperson, Mary

Jo White, and a full set of com-

missioners. The Division of

Economic and Risk Analysis

(DERA) is functioning and

growing and providing support

to the Commission and to its

examination and review func-

tions. Dodd-Frank rule-writing

mandates are being fulfilled,

albeit more slowly than ideal

due to staff and technical con-

straints. The SEC has published

its five-year Strategic Plan and

Proposed Budget and reports

on its historical results. Despite

its inability to obtain its desired

level of funding from Congress,

the SEC has been performing

at its fullest capacity in the past

few years.

During the second week

of December 2014, the annual

AICPA SEC Conference in

Washington, D.C. has featured

key speakers from the SEC’s

Office of the Chief Accoun-

tant, Division of Corpora-

tion Finance, and (possibly)

the Division of Enforcement.

Those speakers have provided

the SEC Staff’s guidance and

observations gleaned from

their year of reviewing complex

accounting and auditing and

disclosure matters. They have

provided commentary and guid-

ance regarding the newest pro-

nouncements of the Financial

Accounting Standards Board,

and their progress in dealing

with the continuing questions of

convergence with International

Financial Reporting Standards.

Their speeches and/or outlines

have been provided or are nearly

ready to be provided to the pub-

lic on the SEC website.

The Division of Corpora-

tion Finance review process

is in its final stages for most

companies that have received

comments on their 2013 disclo-

sure documents, and the staff

is actively reviewing companies

that have other than December

31 year-ends and foreign private

issuers.

TRENDS IN RECENT SEC

ENFORCEMENT ACTIONS

Recent SEC enforcement

actions include numerous

actions against investment advi-

sors and fund managers for

actions found to be prohibited

by regulations and harmful to

investors. Diversion of invest-

ment funds for personal and

noninvestment use and market

manipulation have often been

cited.