Earlier today, the Public Company Accounting Oversight Board (PCAOB) voted to adopt an amendment to its Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles, to exclude from the scope of the rule tax services provided during the portion of the audit period that precedes the beginning of the professional engagement period.
The amendment was provided to remove an unintended consequence of the original rule which limited the choice of audit firms a company could change to.
In addition, the PCAOB voted to adopt a new rule, Rule 3526, Communication with Audit Committees Concerning Independence, which would supersede the Board's interim independence requirement, Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees. The rule would require a registered public accounting firm to communicate to an issuer's audit committee about any relationships between the firm or any of its affiliates and the issuer or persons in financial reporting oversight roles at the issuer that may reasonably be thought to bear on the firm's independence.
The communication with audit committees would be required both before the firm accepts a new engagement pursuant to the standards of the PCAOB and annually for continuing engagements.
Under existing rules, no such communication was required prior to the initial audit engagement.
NOTE: All final PCAOB rules are subject to SEC approval.
UPDATE 11:36 a.m.: Here is the PCAOB's press release on today's vote, which includes the effective dates of the rule amendments/new rule.
Tuesday, April 22, 2008
Monday, April 21, 2008
SEC Moves XBRL Meeting To May 14; FASB-IASB Discuss Updating MOU
The SEC posted this Notice on April 18 that they have rescheduled the open commission meeting to discuss a proposal on XBRL, originally scheduled for today (April 21), to May 14 at 10am.
As such, the SEC open commission meeting on XBRL will follow the next meeting of the SEC Advisory Committee on Improvements to Financial Reporting (CIFiR, or the "Pozen Committee" for chair Robert Pozen), taking place on May 2nd, to discuss testimony and comment letters received on recommendations contained in CIFiR's Progress Report, including recommendations regarding a phased in approach to mandating adoption of XBRL.
See our related post last week: "SEC General Counsel Says XBRL Proposal Will Be Considered "In the Near Future;" Part of Move to Global Convergence."
Three FEI committees commented on CIFiR's XBRL related proposals, and the other CIFiR recommendations, in comment letters filed on CIFiR's Progress Report. See the letters filed by FEI's Committee on Finance and Information Technology (CFIT), the letter filed by FEI's Committee on Small and Mid-Sized Public Companies (the two separate letters are attached here), and the letter filed by FEI's Committee on Corporate Reporting here.
FASB-IASB Discuss Updating MOU
Separately, FASB and the IASB are holding their semi-annual joint board meeting today. Meeting in London, they are discussing an update to the 2006 Memorandum of Understanding (MOU). See this agenda paper on the MOU for further background.
As such, the SEC open commission meeting on XBRL will follow the next meeting of the SEC Advisory Committee on Improvements to Financial Reporting (CIFiR, or the "Pozen Committee" for chair Robert Pozen), taking place on May 2nd, to discuss testimony and comment letters received on recommendations contained in CIFiR's Progress Report, including recommendations regarding a phased in approach to mandating adoption of XBRL.
See our related post last week: "SEC General Counsel Says XBRL Proposal Will Be Considered "In the Near Future;" Part of Move to Global Convergence."
Three FEI committees commented on CIFiR's XBRL related proposals, and the other CIFiR recommendations, in comment letters filed on CIFiR's Progress Report. See the letters filed by FEI's Committee on Finance and Information Technology (CFIT), the letter filed by FEI's Committee on Small and Mid-Sized Public Companies (the two separate letters are attached here), and the letter filed by FEI's Committee on Corporate Reporting here.
FASB-IASB Discuss Updating MOU
Separately, FASB and the IASB are holding their semi-annual joint board meeting today. Meeting in London, they are discussing an update to the 2006 Memorandum of Understanding (MOU). See this agenda paper on the MOU for further background.
Thursday, April 17, 2008
In The Year 2025
As the SEC continues to receive comments(as recently as April 15) on the 116-page “Petition for Interpretive Guidance on Climate Risk Disclosure” filed jointly by 22 signatories on Sept. 18, 2007 (there’s also the “Petition for Interpretive Guidance on Business Risk of Global Warming Regulation” filed by the Free Enterprise Action Fund Oct. 22, 2007), President Bush spoke yesterday on “Taking Action to Confront Climate Change,” announcing, “a new national goal to stop the growth in U.S. greenhouse gas emissions by 2025.”
In his speech, the President noted, “To reach our 2025 goal, we will need to more rapidly slow the growth of power sector greenhouse gas emissions so that they peak within 10 to 15 years, and decline thereafter.. . By doing so, we will reduce emission levels in the power sector well below where they were projected to be when we first announced our climate strategy in 2002.”
He added, “There are a number of ways to achieve these reductions, but all responsible approaches depend on accelerating the development and deployment of new technologies."
Reactions to the President’s plan varied, as noted in the article by James Gerstenzang and Richard Simon in today’s Los Angeles Times, “President Bush Offers Goals to Fight Climate Change." and in the AP wire story carried in USAToday, "Bush Revises Strategy on Curbing Greenhouse Gases."
Separately, Elizabeth Williamson reports in today's Wall Street Journal, "Climate Issues Divide U.S. Chamber Of Commerce, Big Members.”
In reading about the announced climate change goal for 2025, I was reminded of the song “In the Year 2525,” recorded by Zager & Evans in 1969. The lyrics begin, “In the year 2525, if man is still alive, if woman can survive…” A later verse says, “In the year 9595 I'm kinda wonderin' if man is gonna be alive, he's taken everything this old earth can give, and he ain’t put back nothing.”
The President’s remarks on climate change followed by about four hours the visit of Pope Benedict XVI to the White House. Did the meeting with the Pope influence the President’s views on climate change (albeit the remarks were prepared in advance of the visit)? Perhaps only they will know.
In addition, the President’s announcement came two days ahead of: “U.S. Governors to Gather at Yale for Climate Change Conference.”
Committees Appointed by Treasury Recommend Best Practices for Hedge Funds
Speaking of clearing the air, “Hedge Funds Need More Oversight, Transparency, Treasury Panels Say,” reports David Cho in today’s Washington Post. He notes, “Two committees appointed by the Treasury Department called yesterday for greater accountability within the secretive world of hedge funds and pressed fund managers to detail their investment activities, saying such moves would help the troubled financial markets.”
Further details on the hedge fund announcement are in Treasury’s April 15 press release, “PWG [Presidents Working Group] Private-Sector Committees Release Best Practices for Hedge Fund Participants.” The two committee reports – the Asset Managers Committee chaired by Eric Mindich of Eton Park Capital, and the Investors Committee chaired by Russell Read of CALPERS – along with other committee information, are available at: http://www.amaicmte.org.
In his speech, the President noted, “To reach our 2025 goal, we will need to more rapidly slow the growth of power sector greenhouse gas emissions so that they peak within 10 to 15 years, and decline thereafter.. . By doing so, we will reduce emission levels in the power sector well below where they were projected to be when we first announced our climate strategy in 2002.”
He added, “There are a number of ways to achieve these reductions, but all responsible approaches depend on accelerating the development and deployment of new technologies."
Reactions to the President’s plan varied, as noted in the article by James Gerstenzang and Richard Simon in today’s Los Angeles Times, “President Bush Offers Goals to Fight Climate Change." and in the AP wire story carried in USAToday, "Bush Revises Strategy on Curbing Greenhouse Gases."
Separately, Elizabeth Williamson reports in today's Wall Street Journal, "Climate Issues Divide U.S. Chamber Of Commerce, Big Members.”
In reading about the announced climate change goal for 2025, I was reminded of the song “In the Year 2525,” recorded by Zager & Evans in 1969. The lyrics begin, “In the year 2525, if man is still alive, if woman can survive…” A later verse says, “In the year 9595 I'm kinda wonderin' if man is gonna be alive, he's taken everything this old earth can give, and he ain’t put back nothing.”
The President’s remarks on climate change followed by about four hours the visit of Pope Benedict XVI to the White House. Did the meeting with the Pope influence the President’s views on climate change (albeit the remarks were prepared in advance of the visit)? Perhaps only they will know.
In addition, the President’s announcement came two days ahead of: “U.S. Governors to Gather at Yale for Climate Change Conference.”
Committees Appointed by Treasury Recommend Best Practices for Hedge Funds
Speaking of clearing the air, “Hedge Funds Need More Oversight, Transparency, Treasury Panels Say,” reports David Cho in today’s Washington Post. He notes, “Two committees appointed by the Treasury Department called yesterday for greater accountability within the secretive world of hedge funds and pressed fund managers to detail their investment activities, saying such moves would help the troubled financial markets.”
Further details on the hedge fund announcement are in Treasury’s April 15 press release, “PWG [Presidents Working Group] Private-Sector Committees Release Best Practices for Hedge Fund Participants.” The two committee reports – the Asset Managers Committee chaired by Eric Mindich of Eton Park Capital, and the Investors Committee chaired by Russell Read of CALPERS – along with other committee information, are available at: http://www.amaicmte.org.
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