President Trump will likely not be cutting accounting regulations, and there is no indication that any pending accounting standard updates will be changed in his administration.
President Trump signed an executive order on January 30, 2017, that requires two executive branch regulations to be cut for every new one created. He cited the executive order today, February 16, 2017, in a live press conference.
From today’s press conference President Trump appears more interested in what he describes as excessive regulations where “we do not need four, five or six regulations saying the same thing.” He sees the EPA for example, as hindering corporations with unnecessary and burdensome regulations. He said we will have “safe regulations” adding “companies will be denied quickly so they do not need to spend tens of millions of dollars to be denied years later.” Whether or not President Trump can accomplish that objective is the scope of another article.
Applies to Every Regulation?
Upon release of the executive order, but before the press conference, Tom McGarity, Law Professor at the University of Texas, was quoted by the Washington Post as saying that the President’s two-for-one regulation scrap “applies to every regulation. It is not limited to major regulations.” Naturally, accountants are wondering if some financial reporting regulations will be altered or entirely scrapped.
On January 31, 2017, PWC conducted a live quarterly webcast on Governance Insights to an audience consisting mainly of corporate executives, auditors, controllers, tax professionals and others. During a Q&A one audience member asked if there was any indication that President Trump would scrap accounting standards. A PWC Partner said “no.”
Brexit, Trump Presidency.
Before President Trump assumed his position, accountants were questioning how their profession may change. On December 6, 2016, in the Journal of Accountancy, Ken Tysiac posted an article “Will Brexit, Trump affect global accounting standards,” and he posed the question if these two turn of events will “result in a retreat from global accounting standards”?
Many people have compared the similarities in the election of President Trump to Britain’s vote to leave the European Union - aka “Brexit.” Brexit occurred in June 2016, more than five months before President Trump’s nomination. If there are parallels to be drawn in the realm of financial reporting regulation, perhaps we can look at how Brexit has affected the accounting regulations in Britain, or how the International Accounting Standards Board (IASB) is dealing with their accounting standards. During the AICPA National Conference on Current SEC and PCAOB Developments in December 2016, IASB Chairman, Hans Hoogervorst said “it is too early to tell, but for now we see no immediate consequences,” adding that Britain continues to show support for the continued use of IFRS.
One can draw a similar conclusion with the regulations for US accounting standards. Ken Tysiac’s Post goes on to mention that Hans Hoogervorst “believes President Trump has other concerns that are more pressing than global accounting standards.”
During the PWC live webcast, the speakers, trying to gauge audience views, presented several surveys to the attendees. PWC summarized the respondent’s answers as:
So it seems that accountants can relax, or at least revert back to their normal worries about quarterly reporting, and such. They are fortunately unfortunate in that they remain safely removed from their regulations being scrapped.
Continue the discussion at Bloomberg BNA Accounting LinkedIn.
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