ACCOUNTING AND AUDITING HIGHLIGHTS WEEK ENDING JULY 28, 2017


ACCOUNTING HIGHLIGHTS:

TREASURY DEPARTMENT

July 20: The Senate Finance Committee approved David J. Kautter, President Donald Trump's choice to be assistant secretary for tax policy at the Treasury Department. The unanimous vote allows the nomination to go to the full Senate. If confirmed, Kautter will play a key role in shaping tax policy as Republicans work to overhaul the tax code.

SECURITIES AND EXCHANGE COMMISSION

July 20: The Securities and Exchange Commission cut its rulemaking agenda by about half, according to the agency's semi-annual regulatory docket. “Mr. and Ms. 401(k) would not be happy about the new regulatory agenda published by the SEC today,” Dennis Kelleher, president and chief executive officer of Better Markets, said. “While it includes some important items that may improve our markets and protect investors, it falls far short of achieving the kinds of Main-Street-Investor oriented goals that the SEC exists for.”

ETHICS

July 21: Less than a third of corporate executives polled by Deloitte are confident that their employees will blow the whistle on unethical behavior. “If there was one area that I felt was worrisome, it was that statistic,” Carey Oven, a risk and financial advisory partner at Deloitte & Touché LLP, told Bloomberg BNA.

GOVERNMENT ACCOUNTING

July 22: State and local governments will be getting answers to hundreds of questions on how they are to apply accounting for non-pension retiree benefits. The Governmental Accounting Standards Board proposed about 507 questions and answers in an implementation guide to clarify, explain or elaborate accounting and financial reporting for Postemployment Benefits Other Than Pensions (OPEBs).

DISCLOSURE

July 22: Companies trying to make sure minerals in computer chips, jewelry, and other products don't fuel conflict in Africa still struggle with identifying their source. Two-thirds of companies that submitted conflict minerals reports to the SEC this year didn't say where their minerals were mined. That's essentially unchanged from last year and the year before.

CAPITAL FORMATION

July 23: U.S. regulators said they have jurisdiction over one of the hottest new areas of finance: initial coin offerings of digital currencies. Companies that raise money through the sale of digital assets must adhere to federal securities laws, the SEC said. Issuers must register the deals with the government unless they have a valid excuse, as should exchanges that offer trading of cryptocurrencies like bitcoin and ether, the regulator said.  

PENSION BENEFIT GUARANTY CORPORATION

July 23: The Pension Benefit Guaranty Corporation wants feedback from the pension community on regulatory and deregulatory actions, the agency said. The agency listed 13 questions, most of them aimed at garnering feedback on the administrative burdens that plan sponsors face. The PBGC is asking the public to weigh in on whether there are PBGC regulations that eliminate jobs or inhibit job growth.

ACCOUNTING STANDARDS

July 24: Advocates for block chain technology and the digital currencies it supports told Bloomberg BNA those databases can't meet their potential in U.S. capital markets unless the U.S. standard setter fashions accounting rules specifically for them. “We have many companies that are members of the Chamber of Digital Commerce. They're operating in the block chain ecosystem and if they're holding or have on [their] balance sheet digital assets, they cannot get audits” said Perianne Boring, founder and president of Chamber of Digital Commerce. “They're having a very, very difficult time obtaining an audit”

DIGITAL CURRENCY

July 24: The cryptocurrency world is breathing a sigh of relief after U.S. regulators finally weighed in on initial coin offerings, saying that companies which raise money through the sale of digital assets must adhere to federal securities laws.

CYBERSECURITY

July 24: SEC Chairman Jay Clayton said that if companies act responsibly to protect themselves and makes disclosures on cyberattacks, regulators shouldn't “be punishing them for being a victim.”  Clayton's remarks come as corporate fears over data breaches continue to increase.

INTERNATIONAL ACCOUNTING HIGHLIGHTS:

INDIA

July 21: India's tax authority issued final rules this month on how private limited companies will value unlisted shares, clarifying a change that aims to stop tax evasion in a private share sale. Corporate restructuring will “face the heat, in this case” as the government's measure targets tax planning that capitalizes on deliberately underpricing unlisted shares, Neha Malhotra, executive director of Delhi-based Nangana & Co. LLP, told Bloomberg BNA.

RUSSIA

July 22: Russia's tax agency will start releasing businesses’ tax and financial reporting information in an effort to allow market participants to improve their risk-assessment on selecting business partners. This will include information on back taxes and tax violations, as well as information on membership in consolidated groups and special tax regimes that businesses are allowed to use.

SUSTAINABILITY

July 23: The European Commission backed recommendations to curb climate risk that could include European Union labels for green bonds and preferential treatment for ecologically sustainable investments. Green bond labels could be a “powerful tool” to help investors choose assets that are reducing greenhouse gas emissions, said Valdis Dombrovskis, the commissioner in charge of financial-services policy.

INTERNATIONAL DEVELOPMENTS

July 24: The U.K. government must act to safeguard the nation's accounting and auditing quality as part of negotiations on its divorce from the European Union, the nation's financial-reporting authority told Bloomberg BNA. The U.K. Financial Reporting Council said that the government in some cases should consider intermediate accounting and auditing policies once the U.K. leaves the EU.

INTERNATIONAL DEVELOPMENTS

July 24: The U.K. accounting regulator wants companies to include in their financial reports information about any significant impacts that the country's departure from the European Union could produce. “When Brexit risks are material, we encourage companies to disclose these as part of their principal risks and uncertainties in the strategic report,” the U.K. FRC told Bloomberg BNA.  

CORPORATE GOVERNANCE  

July 24: U.K. regulators set out plans for ensuring senior staff of financial-services firms can be held to account for misconduct on their watch, extending rules already in place for banks to almost all firms. Senior managers’ responsibilities will be clearly set out so that they can be held responsible for their own and their staff's actions.

Composed and Compiled by Gery Brownholtz, Accounting Editor, Bloomberg BNA

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