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…. And, just what is our regularly scheduled programming? Typically, we cover happenings at the FASB, IASB, SEC, PCAOB, and the U.S. Treasury Department - as relates to financial reporting. (Occasionally, we flavor the alphabet soup with news from the IRS or DOJ.) So, in that order, here’s a roundup of recent news:

FASB will webcast a mid-year update on Monday June 23 at 2pm EDT, to discuss, among other things, their upcoming amendments to standards on securitization and off-balance sheet entities (FIN 46R and FAS 140), including removing Qualified Special Purpose Entities (QSPEs) from the literature. Some of the amendments have been in the works for a couple of years, others have been accelerated in light of the subprime crisis and related credit market turmoil, which prompted the President’s Working Group and the SEC to ask FASB to readdress these standards this year. See some of our previous coverage of these issues here, here, here, here, here, here and here.

The IASB held a roundtable on its Constitutional Review on June 19. Bolstering governance and funding of the IASB and the International Accounting Standards Committee Foundation (IASCF) which oversees it, is a priority not only in the U.S. – which is considering moving from U.S. Generally Accepted Accounting Principles (U.S. GAAP) published by the FASB, to International Financial Reporting Standards (IFRS) published by the IASB, but also a priority to European and other regulators worldwide who are seeking a formal level of accountability from the IASB, given what amounts to the IASB’s quasi-legislative role in issuing standards that are required to be adopted (in over 100 countries now) by virtue of the European Union’s and other countries’ requirements that listed companies in their jurisdiction adopt IFRS. Earlier this week, you may have seen the joint statement issued by the SEC, European Union and Japan FSA, supporting IASCF’s proposed formation of an IASCF Monitoring Group, consisting of reps from those regulatory agencies as well as reps from IOSCO and the World Bank.

But – did you know the IASCF is also considering breaking their tradition of avoiding geographic ‘quotas’ for IASB board members, and instead is considering expanding the current 14 member IASB board to 16 members, adding an explicit geographic requirement of 4 IASB board members from North America (Canada has already formally announced it is in process of moving to IFRS), 4 from Europe, 4 from the Asia/Oceana region, and 4 others from any region. Increasing North American representation on the IASB may help pave the way for the SEC to permit- or require – adoption of IFRS in the U.S. for public companies, and may also help smooth the way for private company adoption of IFRS. Details of proposals discussed in the IASCF’s Constitution Review are in this draft Discussion Document (aka issues and proposals), which indicates it is on the road toward being published for public comment, with a comment deadline tentatively falling in September. See also our coverage of this week’s FASB’s Forum on High Quality Global Accounting Standards, including expectations regarding SEC’s upcoming ‘IFRS Roadmap,’ here.

Other significant news from the IASB this week includes the announcement of release of a summary of the June 13 closed door meeting of IASB’s Expert Advisory Panel on Valuation of Financial Instruments in Inactive Markets. The IASB was asked to address these matters and others by the G-7 Group of Finance Ministers, who not only endorsed (in April) related recommendations of the Financial Stability Forum (FSF), but asked that certain actions be taken within 100 days, as we previously noted here.

SEC: continuing on the topic of Fair Value for a moment, we previously reported (citing a WSJ interview of the SEC Chairman) that the SEC plans to hold a roundtable on fair value measurement issues in July. More recently, an article published by BNA on June 2, ("SEC Officials Defend Fair Value Rules in Credit Crisis, Say Investors Better Served") citing remarks by SEC Chief Accountant Conrad Hewitt and Deputy Chief Accountant Jim Kroeker at a USC conference, noted the SEC's fair value roundtable was planned for July 8.

On the rulemaking front, next week, the SEC will hold the second of two open meetings on proposed rulemaking regarding Credit Rating Agencies (CRAs). See the Sunshine Act Notice published by the SEC in advance of next week’s meeting, and see our previous coverage of CRA rule proposals discussed at SEC’s June 11 meeting here and here.

Of course, today’s front page news “2 Face Fraud Charges in Bear Stearns Debacle” (NYT), “Former Fund Managers Face Fraud Charges in Credit Crisis” (WashPost) – and, in the case of the Wall Street Journal, page C-1 news: “Two Ex-Managers at Bear Indicted Over Hedge Funds,” and “Youz Indictin’ Who? A Rivalry Grows For Stock Cops in Brooklyn, Manhattan,” covers the arrest yesterday of former Bear Stearns managers Ralph Cioffi and Matthew Tannin.
The two were charged with conspiracy, securities fraud and wire fraud, as noted in this DOJ press release. Among actions cited leading to their arrest are emails noting concern about prospects for hedge funds that later tanked, as well as alleged false information they gave the public about their own personal investments in the funds, while touting the funds to increase investor confidence. The SEC concurrently brought charges yesterday against Tannin and Cioffe, as noted in this SEC press release. The Bear Stearns hedge fund crisis, which arose about a year ago, was one of the first major markers (to the broad public, at least) of the broader subprime crisis. See our earlier reporting on Bear Stearns here and here.

In other SEC news… SEC Chairman Christopher Cox published an op-ed in the WSJ yesterday, entitled, “A Brave New World for Financial Regulation,” in which he describes the Federal Reserve guaranteed bailout of Bear Stearns following the ‘run on the bank’ the firm experienced and the related opening of the Fed’s discount window to investment banks to prop up liquidity. As to the SEC’s role, he notes: “SEC regulation was supposed to protect the broker-dealer's customers, which it did.” Although he does not go into a technical discussion of SEC’s role in supervising investment banks under the SEC’s Consolidated Supervised Entities (CSEs) program, he observes that Bear Stearns’ capital level, had it been a commercial bank, would have been deemed ‘well capitalized.’ However, he notes additional protections available to commercial banks in times of crisis were not available to investment banks like Bear Stearns.

As a result, Cox notes, “It is clear that these protections are no longer enough…. Should the extensive system of commercial banking supervision and regulation, developed in large measure to counter the problem of moral hazard, be extended to investment banks? If so, who should be responsible for it?”

“In my judgment, explicit legislative authorization for what is now a purely voluntary program of SEC supervision is vital,” adds Cox, “But even if legislation is not forthcoming, the arrangements being worked out by the SEC and the Fed can serve as a sturdy approach for the indefinite future.”

Cox’ op-ed may have been a run-up to the remarks of U.S. Treasury Secretary Henry Paulson, in a speech Paulson gave yesterday, in which he gave an update on the economy and focused on the need to accelerate discussions on Treasury’s Blueprint for regulatory reform issued earlier this year. Some had viewed the blueprint as potentially reducing the SEC’s and certain banking agencies authority while increasing the Fed’s authority as coordinator of financial market supervision. Cox stated in his oped, “maintaining the diverse perspectives of the Fed and the SEC, within a consultative process, is exceptionally useful.” See our prior coverage of Treasury’s Blueprint here.

Separately, we wanted to remind you that the comment deadline on updated subcommittee reports of SEC’s Advisory Committee on Improvements to Financial Reporting (CIFiR) is June 23, and the comment deadline on the U.S. Treasury Department’s Advisory Committee on the Auditing Profession (ACAP) Draft Report was June 13, with a deadline of July 9 on the Addendum to its Draft Report. See some examples of our previous coverage of CIFiR and ACAP here and here.

PCAOB finalized rules recently (now pending SEC approval) on annual and special reporting of certain information concerning the audit firm and certain events in reports to be filed with the PCAOB. See our related coverage here.

Coming up: the PCAOB announced yesterday the names of panelists that will take part in PCAOB’s June 25 roundtable discussion on: “a proposal regarding the circumstances in which it could maximize its reliance under Rule 4012 on non-U.S. auditor oversight bodies in the context of inspections.”

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