In the article, ”White House Sets June 1 Deadline for Agency Proposals,” (article courtesy of Nasdaq) Martin Vaughan of Dow Jones Newswires reported yesterday that White House Chief of Staff Josh Bolten sent a memo to all federal agencies on May 9 requiring: “all rules to be finalized before the administration leaves office should be proposed by June 1, and final rules should be issued by November 1.” Additionally, according to Vaughan, the memo stated those deadlines apply in all but ‘extraordinary circumstances.’
Additional background was provided by Ralph Lindeman of BNA yesterday in his article: “White House Instructs Agencies to Defer Proposals After May, Final Rules After Nov. 1.” Referencing the Office of Management and Budget’s (OMB’s) Office of Information and Regulatory Affairs (OIRA), Lindeman reported: “Bolten's memo reflects the views of Susan Dudley, OIRA's current administrator, who has spoken publicly and written about the need to stop the midnight regulation phenomenon at federal agencies and departments.”
"Like Cinderella leaving the ball, many of Clinton's 7,000 presidential appointees hurried to issue last-minute 'midnight' regulations before they turned back into ordinary citizens at noon on January 20th," Dudley wrote in the Spring 2001 issue of Regulation, published by the libertarian Cato Institute,” notes Lindeman.
"Some of these new regulations may have been developed carefully over many years, and only just now emerged from the procedural pipeline. But others were hurried into effect without the usual checks and balances, perhaps to avoid scrutiny by the incoming Bush administration,” continued Dudley in 2001, as cited by Lindeman.
Will the White House decree impact the timing of SEC’s anticipated IFRS roadmap, in which the SEC will lay out its plan for considering permitting – or requiring – U.S. public companies to file with the SEC under IFRS instead of U.S. GAAP? Or is a ‘roadmap’ different from a rule ‘proposal’? What about rule proposals that may emanate from any such ‘roadmap’? Will they be subject to the June 1 proposal, Nov. 1 final deadlines noted above? Or – will they fall under the ‘extraordinary circumstances’ exclusion?
It will be interesting to see if this drives the SEC to publish its IFRS roadmap by June 1. Find out the latest at FEI’s Global Financial Reporting Conference on June 5 in NYC: “The World Is Moving To IFRS – Are You?” Hear direct from keynote speaker John White, Director of the Division of Corporation Finance, the status of SEC’s IFRS roadmap/rulemaking, followed by panels of experts from the FASB, IASB, leading audit firms and companies. We are nearing a sell-out at the conference venue, The Coleman Center, sign up now by visiting www.financialexecutives.org/ifrs. BNA Tax & Accounting is the exclusive sponsor of the conference.
Separately, we reported earlier this week the SEC voted to release a proposed rule mandating XBRL for the 500 largest public companies that file in U.S. GAAP for fiscal years ending on or after 12.15.08, with smaller co’s and companies filing in IFRS phased in over the next two years.
Will the White House memo impact SEC’s ability to issue a final XBRL rule this year? Citing David Blaszkowsky, Director of SEC’s Office of Interactive Data, BNA’s Stephen Joyce reports today, “SEC Official Says XBRL Rule May Be Final By Fall as Users Cite Benefits of Proposal.”
“Speaking with reporters during a conference call,” reported BNA’s Joyce, “Blaszkowsky said SEC will, by May 25, finalize and publish the proposed rule, and begin a 60-day comment period on the proposal. The rule "could be" made final by the fall, he said.”
Former Nasdaq official Al Berkeley said XBRL will be "the answer to a data junkie's dreams," reported Joyce.
Dow Chemical's Patsy Ramsey, noted Joyce, said: "Ramsey told reporters her firm was a voluntary early adopter of the XBRL tagging format and while there likely will be an initial expense for companies to comply with the XBRL standard, her firm's experience demonstrated 'the cost need not be significant.' And while there is a cost with adopting the standard, companies may benefit from enhanced accuracy in their financial reporting efforts, Ramsey said."
BNA's Joyce also noted AICPA's Amy Pawlicki said the AICPA has been "busily preparing for such a proposal,” and “has conducted Internet-based educational programs, for instance, to help prepare AICPA members for XBRL adoption.”
In related news, Cynthia Fornelli, Executive Director of the Center for Audit Quality (CAQ) issued a statement following the SEC’s vote to issue its XBRL rule proposal: “The CAQ supports the objectives of enhanced electronic financial reporting to provide better, faster, cheaper and more consistent financial information to support more informed business and investing decisions.
However, it is imperative that the Commission seeks input during the three-year phase in period from preparers about their experiences and the related costs, and from investors about their experiences and the related benefits. These insights would allow the SEC to make a more informed decision about whether broadly mandating XBRL is likely to generate benefits in excess of costs.”
XBRL-US published a report earlier this week entitled, "SEC Rule Change Proposal - Impact on Stakeholders and Readiness of the Market," which states in part: "For preparers, today and in the short-term, a rule change will result in incremental cost and effort beyond what companies currently expend on their financial reporting process."
Separately, as reported by webCPA yesterday, a Grant Thornton survey published May 14 showed “CFOs Lack Experience with Upcoming Standards.” Webcpa noted: “Nearly 75 percent of CFOs and senior comptrollers have no experience using International Financial Reporting Standards, while 55 percent are unfamiliar with the Extensible Business Reporting Language, according to a new survey by Grant Thornton."
Issues relating to potentially converging the two XBRL frameworks (sets of data tags) - i.e. the US GAAP taxonomy developed by XBRL-US and the IFRS XBRL taxonomy developed by the IASCF's XBRL team, will also be among issues to be addressed as the world moves increasingly to use of IFRS and XBRL. (Additional information is also available from XBRL-International.)
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