Important Message From FEI Re: Power Outage and Changes to Blog

Due to Hurricane Irene, FEI Headquarters, located in Morristown, NJ has suffered a major power outage. As soon as power is restored, FEI will be back online. Thank you for your patience.

Additionally, although there will be delays sending out emails from this blog, check back to the blog at http://financialexecutives.blogspot.com for new blog posts this week. You can also keep up with news from the blog and FEI via our twitter accounts at www.twitter.com/feiblog and www.twitter.com/feinews .

In other news, please note the URL to this blog (and the related RSS feed) may change soon in connection with a website update at FEI. Check back to this site for further updates.

CFOs Invited To New FEI Programs; Sept. 1 Conference Call

FEI is sponsoring new programs for Chief Financial Officers. The first program will be a conference call for CFOs to share experiences, challenges, and best practices on: The Role of the CFO, Thurs., September 1 from 1:00 – 2:00 PM EDT.

Use the online signup form if you are:

• an FEI member who is a CFO, to sign up to receive information about future programs for CFOs, or to register specifically for the Sept. 1 conference call;




• an FEI member who wishes to refer the CFO of their company or another company to consider participating in these programs (nonmembers who are CFOs, referred by an FEI member or a member of the FEI staff, may participate in the Sept. 1 program as well as FEI members who are CFOs.




• a CFO who is not currently a member of FEI, but you have been referred to this program or received an invitation from an FEI member or a member of the FEI staff (blog readers: you can write "FEI blog" for the name of the person who referred you to this program; participants must be CFOs).

Got Social Media? Take the FERF-GT Survey

FEI's research affiliate, the Financial Executives Research Foundation (FERF), in partnership with Grant Thornton, is launching the Social Media and Its Associated Risks Survey to look at how social media is changing the face of business in the U.S. and around the world.

With the scope of social media expanding every day, companies have an opportunity to take advantage of business-building and promotional avenues that were not available only a few years ago. These opportunities come with an accompanying list of new risks, however.

Through this survey and in-depth follow up interviews, senior financial executives will learn about practical guidance in social media policymaking and risks to be considered in regard to their companies’ social media plans and strategies. The research will also inform senior financial executives about governance issues, corporate policy, a code of ethics around social media, internal control issues and social media audits.


The good folks at FERF estimate it will take you about 15 minutes to complete the survey. Thank you for your input!

Take survey here.

Disclosure Management: SAP and FEI Offer Half-Day Seminar

SAP and FEI are cosponsoring a half-day program on Building the Case for Disclosure Management - Automating the Last Mile of Finance. Featured speakers include: Jon Church, Managing Director, cundus Inc., George Neal, Sr. Director, Center of Excellence, SAP America, Muthu Ranganathan, Director, SAP America, and Mike Willis, Partner, PwC.Here's a brief program description:

The term “financial close” describes a corporation’s ability to complete its accounting cycles and produce financial statements for internal management and external legal reporting. The requirement to close books quickly and with quality is a key indicator for the success of a company’s finance function.

Recently, there has been an increasing focus on automating the “last mile of finance” with disclosure management solutions, to manage the production, filing, and publication of financial statements and reports, driven in part by the increasing global mandates for companies to submit electronic filings in the XBRL (eXtensible Business Reporting Language) format.

This half-day seminar will focus on trends, issues, and strategies for accelerating the financial close, with a concentration on automating the financial and regulatory disclosure processes.

The program will be offered in four separate cities in September. Sign up for the program in the city of your choice by using the links below.

New York City, NY – September 13

Chicago, IL – September 14

San Francisco, CA – September 15

Dallas, TX – September 20

Will Auditors Be Required To Report "Close Calls"? Tune Into PCAOB's Sept. 15 Roundtable; Comment On The Concept Release

Will auditors of public companies be required to report "difficult" or "contentious" issues, and "close calls," including material matters that were corrected or resolved to the auditor's satisfaction before the end of the reporting period? The auditor could be required to do just that, and more, if ideas put forth in the PCAOB's Concept Release on the Auditor's Reporting Model, published earlier this year, were to advance to proposed and final rulemaking.

Earlier today, the PCAOB announced it will hold a public roundtable on September 15 to gather additional feedback on the Concept Release on the Auditor's Reporting Model, in addition to the feedback it receives through comment letters (comment deadline: September 30). See the PCAOB's Briefing Paper for the Roundtable.

Close Calls, Difficult & Contenious Issues, Would Be Reported By Auditor in Proposed New "AD&A"
As we previously reported, the PCAOB's Concept Release on the Auditor's reporting model includes a proposed new section in the auditor's report called the Auditor's Discussion & Analysis or AD&A, modelled after the SEC requirement for management to provide an MD&A section, or Management's Discussion & Analysis.

Pros and cons associated the above potential new reporting requirement is discussed in Appendix C of the Concept Release under 'staff outreach'. Here is an excerpt, illustrating the varying views of investors and others (preparers, auditors) [style, but not content, reformatted for emphasis]:

3. Difficult or Contentious Issues, Including "Close Calls"

Some outreach participants recommended that the auditor identify in the auditor's report the most difficult or contentious issues discussed with management.

Difficult or contentious issues might arise in various stages of the audit, including in the auditor's evaluation of management's judgments, estimates, and accounting policies. Many outreach participants described difficult or contentious issues as those critical matters that concerned the auditor when making the auditor's final assessment of whether the financial statements are presented fairly.

A difficult issue might not always be synonymous with a contentious issue.

Rather, a difficult issue might be a matter that requires significant consideration or consultation; however, the auditor might agree with management's conclusions regarding the issue.

A contentious issue might be a matter that not only requires significant consideration or consultation but also leads to significant points of disagreement, debate or deliberation between the auditor and management.

Regardless of whether the issue is difficult or contentious, some outreach participants indicated that they would like information concerning how management and the auditor ultimately resolved the issue in order for the auditor to issue an unqualified opinion.

In addition, some outreach participants suggested the auditor should discuss the "close calls" encountered by the auditor in performing the audit.

Some investors described close calls to include matters such as –
• Those accounting decisions that required significant deliberation by the auditor and management before being deemed to be acceptable within the applicable financial accounting framework,
• Those matters related to internal control over financial reporting that required significant deliberation by the auditor and management, and
• A financial statement issue that had a potential material impact to the financial statements and was corrected prior to the end of the period.
Some outreach participants indicated that knowing the difficult or contentious issues or the close calls would provide insight into the auditor's significant judgments.

Others suggested that the auditor provide a listing of the issues in the auditor's report (e.g., difficult, contentious, or close calls) without the auditor's views. Based on this information, financial statement users could determine if further investigation is warranted as part of their investment analysis.

However, other outreach participants believe that if the difficult or contentious issues, or "close calls" are resolved to the auditor's satisfaction then description of them in the auditor's report would not provide relevant and useful information and could be misleading regarding the meaning of the auditor's opinion (i.e., the issuance of an unqualified opinion demonstrates that the auditor has satisfactorily resolved all material matters).

Some outreach participants indicated that due to the financial complexity of most public companies and their many accounting policies and estimates, there are typically a significant number of difficult or contentious issues or close calls in the normal course of the audit. Therefore, it may be hard for the auditor to determine which particular issues are most important to be discussed in the auditor's report.

Next Steps
The potential requirements listed above, and other ideas floated in the PCAOB's June 2011 Concept Release on the Auditor's Reporting Model - not to be confused with PCAOB's August, 2011 Concept Release on Auditor Independence (see Jim Petersen's latest post on the auditor independence concept release in his blog, Re:Balance; and Broc Romanek's post today in TheCorporateCounsel.net blog) are just what the title of the document says - "Concepts," they are not "standards" or "rules" - yet.

That is, some of the concepts in the Concept Release ultimately may not become standards or rules, or could be further fine-tuned, based on the PCAOB board's deliberations upon reviewing public comments received on the Concept Release, as well as comments received if the board advances the ball to the next step of issuing proposed rulemaking (i.e., a proposed auditing standard(s) on the auditor's reporting model). Then, the PCAOB board would deliberate developing a final standard after reviewing comments received on the proposed standard(s).

My Two Cents: This is a "Big Deal"
Before proceeding, I remind you of the disclaimer posted on the right side of this blog. I believe the significant potential changes to the auditors' report bear careful attention by preparers, auditors, investors and others, particularly issues such as the reporting of 'close calls' that were caught by the auditor or raised by the auditor in the review of financial statements prior to the information in question being publicly reported, and after any corrections or modifications were made to the auditor's satisfaction. In some ways, that would be like putting the teacher's or professor's grade of your 'rough draft' on your final report card, vs. your final grade after making changes based on the teacher/professor's suggestions. Or, like having doctor's report out to you a mistake they 'almost' made, but caught in time. As much as that might sound like information you'd 'like to know,' is there a 'need to know,' and could not only the cost of such reporting (including hours of time in the general counsel's office and outside counsel of the reporting entity and potentially the audit firm) worth it on such highly judgemental instances, particularly if modifications and corrections were made pre-publication to the auditor's satisfaction? Is such reporting best suited for public reporting, or internal reporting to the board of directors, particularly the audit committee?

The items discussed in this post are only a few of the concepts floated in the PCAOB's Concept Release. I would suggest interested parties (preparers, auditors, investors and others) review the Concept Release, tune into the Sept. 15 PCAOB public roundtable, and consider submitting a comment letter by the September 30 deadline. Thoughtful commentary, particularly when it includes data that substantiates practical considerations, and includes suggestions for alternatives that may better assist in reaching the goal of a particular proposal, can assist standard-setting and regulatory bodies in producing thoughtful rules and standards. Reference can be made to comment letters filed so far on this Concept Release.

PCAOB Issues Concept Release on Auditor Independence; Comments Due Dec. 14

Earlier today, the PCAOB voted to issue a concept release to solicit public comment on ways that auditor independence, objectivity and professional skepticism can be enhanced, including through mandatory rotation of audit firms. Comments are due Dec. 14, 2011. The action was expected, as noted here.

In related news, the PCAOB announced that a public roundtable on auditor independence and mandatory audit firm rotation will be held in March 2012.

Additional details and related reading can be found in:
*** We will insert a link to the Concept Release here, when it is posted by the PCAOB.
PCAOB’s press release
Chairman Jim Doty’s Statement
Board Member Dan Goelzer’s Statement
Board Member Jay Hanson’s Statement
Board Member Lew Ferguson’s Statement

Other voices:
Dear Auditors: My Response to Your Request for Comments, Francine McKenna, author of blog, Re: The Auditors
A Prescription For What Ails Large-Company Audit: Real Medicine, For A Change, Jim Peterson, author of the blog: Re:Balance.

COSO Exposure Draft, Updating Internal Control Framework, Expected October/November

In an online interview published by the AICPA's Journal of Accountancy, AT&T Director Bill Schneider, a member of the COSO Advisory Task Force, provides a briefing on the objectives of COSO's current project to update its landmark 1992 Internal Control-Integrated Framework, and states that an Exposure Draft of the update is expected to be released for public comment in October or November. (See 2:40 on the AICPA JofA video, Modernizing the Internal Control-Integrated Framework, for the discussion of expected timing of the ED.)

Schneider also notes that COSO plans to publish a separate supplement to the updated internal control framework, focusing on applying the framework to external financial reporting. Interest in the COSO framework was renewed following the Sarbanes-Oxley Act, which required management and auditors to assess the effectiveness of internal control over financial reporting and make a related attestation thereto, respectively.

FEI is one of the five founding members of COSO, along with the AAA, AICPA, IIA, and IMA. COSO board members and additional representatives from the five member organizations amke up the COSO advisory task force, which is providing input to, and overseeing the development of the updated framework, the heavy lifting of which is being conducted on behalf of COSO by audit firm PwC.

Further on the internal control/anti-fraud front, here's some related reading material:

• Committed to Fraud Prevention, published in CFO.com, authored by Tracey L. Coenen, founder of forensic investigation firm Sequence, Inc. and author of The Fraud Files blog.


• Creating a Culture of Compliance, published in CFO.com, authored by Kimberly Blanton, a former reporter with the Boston Globe, and author of the blog Squared Away: Frontiers in Financial Literacy.


• FEI Joins Anti-Fraud Effort with CAQ, IIA, NACD (10/6/10)


• Deterring and Detecting Financial Reporting Fraud: A Platform For Action (CAQ 10/6/10)


• SEC Whistleblower Program Open For Business; Takes Effect Today (FEI blog 8/12/11)


• SEC's New Tips System Gets Good Marks From Markopolos (FEI Blog 7/28/11)


• COSO Contemplates Expansion of 5-point Internal Control Framework Into 20+ Principles; Potential Impact on Sarbox 404 Assertions (FEI blog 3/25/11)
  

Feel free to post additional links to helpful information in the comments section of this blog. If you received this blog post from 'a friend' and would like to receive updates to the blog directly by email, send an email to blogs@financialexecutives.org and write in the Subject line: Sign Up. And you can follow us on Twitter at www.twitter.com/feiblog.

CFOs From U.S., France and Italy On The Economy, Hiring, More

CFOs from the U.S., France and Italy provided their views on the global economy, their plans for hiring in the next six months, the U.S. debt situation, health care costs, and more, in the latest FEI-Baruch CFO Outlook Survey, published yesterday. Highlights:

• Federal Reserve Board Chairman Ben Bernanke received a grade of "B" from most U.S. CFOs



• CFO optimism declined among U.S. CFOs and their counterparts in France and Italy



• Over half the U.S. CFOs plan to hire in the next six months; less than half the CFOs from France and Italy plan to hire in that timeframe

The complete FEI-Baruch CFO Outlook Survey results are available from the Financial Executives Research Foundation (FERF) online bookstore.

Separately, CFO.com released their own survey results yesterday as well, including views on the U.S. debt situation.

SEC's New Whistleblower Program Open For Business; Takes Effect Today

The SEC's new whistleblower program, created under rulemaking implementing the Dodd-Frank Act, is effective today. See the SEC's press release issued this morning: SEC's New Whistleblower Program Takes Effect Today, which links in turn to the SEC's central portal for reporting as a whistleblower and related info: www.sec.gov/whistleblower.

See also this Introduction by Office of the Whistleblower Chief Sean McKessy, and McKessy's remarks 8.11.11 at Georgetown University. Props to Dave Lynn of TheCorporateCounsel.net Blog for the heads up in his post earlier today: W-Day is Here: The SEC's Whistleblower Rules Are Now Effective.

FASB Approves Simplification Of Goodwill Impairment Testing

At its board meeting yesterday, FASB approved an amendment to its standards which will simplify testing for goodwill impairment. According to FASB's press release, the Accounting Standards Update, expected to be issued in September, will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, and early adoption will be permitted.

Amendment Suggested By Private Cos; Will Be Available To All Cos.
FASB Board Member Daryl Buck, who joined the board earlier this year with a wealth of private company experience, including, most recently, as SVP and CFO of Reasor's Holding Company, explained in FASB's press release:

The Board’s decision today comes as a direct result of what we heard from private companies, which had expressed concerns about the cost and complexity of performing the goodwill impairment test. The amendments approved by the Board address those concerns and will simplify the process for public and nonpublic entities alike.

Qualitative Assessment

To simplify the goodwill impairment test, a qualitative assessment will be permitted to determine if the two-step quantitative goodwill impairment test is needed. As further described in FASB's press release (reformatted to bullets):

• An entity no longer will be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount.


• The guidance also includes examples of the types of factors to consider in conducting the qualitative assessment.


• Prior to today’s decision, entities were required to test goodwill for impairment, on at least an annual basis, by first comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit is less than its carrying amount, then the second step of the test is to be performed to measure the amount of impairment loss, if any.

The goodwill testing simplification approved by FASB yesterday, emphasizing what some would view as a principles based, qualitative approach with example factors to consider, aims at reducing unnecessary complexity in financial reporting. If you haven't seen it, check out our 'music video' on this subject.

PCAOB To Vote Next Week Whether To Issue Concept Release On Auditor Independence

The PCAOB will vote next week on whether to issue a Concept Release for public comment on Auditor Independence and Audit Firm Rotation. (For background, see our earlier post, PCAOB To Consider Mandatory Audit Firm Rotation.) The vote is set to take place at an open meeting Tues. Aug. 16 at 9:30 a.m.; the meeting will be webcast.

According to the PCAOB's press release announcing next week's meeting, the Concept Release being considered would address:

ways that auditor independence, objectivity, and professional skepticism could be enhanced, including mandatory audit firm rotation

I believe (please note the disclaimer on the right side of this blog) we can be reasonably assured that the PCAOB board will vote to issue the above Concept Release. In fact, I believe it is more likely than not that board's vote will be unanimous in favor of issuing the Concept Release.

The reason why I assert the above, is because a Concept Release is not formal rulemaking per se, but an early opportunity for public comment on an issue(s), which in turn provides insight to the PCAOB in determining if, when and how to go to the next step of proposed standard-setting.

Speaking generally, (not about this Concept Release specifically), if some matters described in a Concept Release elicit comment that a better solution would be through means other than new standard-setting - e.g., if a proposed solution appears to be burdensome and/or ineffective for a majority of audit firms/issuers/investors, and moreso, if it appears to be a solution in search of a problem; or if the perceived problem could be better addressed through enforcement of existing standards, or through improvements that can be achieved via best practices. Additionally, there is an interplay to be considered between the PCAOB's Auditor Independence standards, and those of the SEC. (As background, the SEC has some archived material on this subject, as of 2001.)

In considering the likely issuance of the Concept Release on Auditor Independence next week, and preparing comment letters thereon, it will also be important to consider potential changes not only to how audits are conducted, but also the product of the audit. In that vein, keep in mind the September 30 comment deadline for another Concept Release issued by the PCAOB earlier this year, on the Auditor's Reporting Model.

Big GAAP/Little GAAP: A 'Big Deal'

The FAF's consideration of whether and how to establish differential accounting standards for public vs. private companies, referred to colloquially as Big GAAP/Little GAAP, has great import for private companies and the users of their financial statements in particular, and is of interest to public companies and the U.S. Securities and Exchange Commission as well, as noted in SEC Chief Accountant Jim Kroeker's June 5 speech at USC.

Before continuing, please note the disclaimer posted on the right side of this blog.

When we last covered this subject in July, we noted that over 1,100 comment letters had been filed with the FAF, a majority of which constituted variations of a form letter with points said by some to have been circulated by the AICPA, backing the recommendation of a broad-based Blue Ribbon Panel on private co. standard-setting (a panel co-sponsored by the FAF, AICPA and NASBA), which concluded that a new standards board should be established under the FAF to focus on private company standard-setting.

We also noted that not all comment letters held that view, in fact the letter filed by FEI's Committee on Private Company Standards, in an April comment letter, took the recommendation of the Blue Ribbon Panel and modified it to some extent, by suggesting that the FAF form a Private Company Task Force (PCTF), structured and empowered to participate in the standard-setting process in a similar manner to FASB's Emerging Issues Task Force (EITF).

During the last few weeks in July, another 500 comment letters were filed with the FAF on this topic. (See all comment letters filed to date.)

In an article published earlier this week, Private Co. GAAP Heats Up, (subtitled: An intense lobbying effort to keep new standards for private companies out of FASB's grasp is under way), CFO.com's Alix Stuart writes:

At least 15 state CPA societies, including those in Alabama, Illinois, New Jersey, and New York, have sent letters to the FAF urging a separate board, according to Maryland Association of CPAs CEO Tom Hood, who also penned a letter. ...“This issue has been around for 30 years, and this is a once-in-a-lifetime chance to get it right,” says Hood. “If it doesn’t happen now, it will never happen.”

Stuart observed that of the over 1,500 comment letters so far, there were "multiple submissions from many CPA firms and predominantly in boilerplate language. Most appear to be in favor of a separate board, for various reasons. ... the AICPA provides a Mad Libs–style letter template with phrases and sentences for commenters to plug in... Notably, however, Finance Executives International's Committee on Private Company Standards submitted the first letter, in April, opposing the idea. 'Working within. . .the FASB would avoid some of the implementation issues that would require state recognition of a new standard setting body' and would also be less expensive, the letter noted."

NVCA, NYSSCPA, MACPA, NCCPAP Letters
Of the more recent comment letters filed, some have very powerful arguments, and are very instructive as to how, in some cases, certain constituencies (such as the National Venture Capital Association) have strongly held views calling for a separate standards board for private companies. NVCA's letter, signed by its President, Mark Heesen, included 76 additional venture cap member signatories, and states:

As an asset class committed to investing in America’s most promising private companies, the venture capital industry understands the importance of
accurate, transparent and meaningful financial reporting practices. While
tremendous advances in information technology have been made in the last
decade, the same can not be said for private company accounting standards
which have been wrongly based on public company practices for too long. Private company standards have become both burdensome and irrelevant, rendering them costly for preparers and meaningless for users. As investors in these companies we assert that the situation has become untenable and must be addressed.

On behalf of our firms and portfolio companies, we support the creation of a separate private company board with standard-setting authority under the Financial Accounting Foundation’s oversight. Through this independent board, appropriate modifications to existing U.S. GAAP (generally accepted accounting principles) for private companies would be driven to reflect their financial statement users’ unique needs.

It has become clear that the Financial Accounting Standards Board (FASB), despite past efforts, is not able to adequately address the issues faced by private companies... Applying accounting standards designed for public entities diverts precious private company resources to meet standards which result in statements which are not relevant, reliable, nor comparable. A private company board comprised of members with constituent experience would be best positioned to recognize the important needs of private company reporting. Such a group would also be able to ensure an effective and useful path to public company accounting
principles as a company moves toward becoming public. If left unaddressed, current private company accounting practices will continue to negatively
impact our country’s emerging growth companies. At a time when economic recovery is paramount, we must be do all we can to ensure that financial reporting is efficient, effective and relevant for all stakeholders. ...

We applaud the FAF’s recognition of these issues and its wisdom in forming the Blue Ribbon Panel and strongly encourage the adoption of the panel’s recommendations. Anything short of adoption would be at the expense of US private companies.

The New York State Society of CPAs struggled with a nearly split view on the question of whether or not there should be an entirely separate standards board for private companies, although a majority of its members and leadership polled agreed there should be differential standards for private companies, by developing more exceptions and modifications of GAAP (vs. developing a new set of private company GAAP), and in the end, following the recommendation of a slight majority of its leadership, recommended forming a separate or 'autonomous' standards board for private company standards, in part because:

there is not a proper weighing of costs and benefits in setting standards for private companies and there is a need for more relevant financial statements for private companies and their financial statement users. Given the public company reporting pressures placed upon the FASB, the Board cannot adequately respond to the competing needs of the private company sector.

Others, such as the Maryland Association of CPAs, supported their call for a new standard-setting board for private companies with a white paper prepared by MACPA's Accounting Standards Task Force. The white paper summarized input from discussions held with over 1,500 MACPA members at town hall meetings in which:

More than 90 percent of members polled ... believed GAAP modifications and
exceptions for private companies are the best solution to the problem... [and
that MACPA's] Task Force agreed that a separate board for private companies
is warranted

MACPA's white paper also notes that while "A majority of the Task Force wanted the separate board to have ultimate authority over standards decisions for private companies," there was a dissenting opinion in favor of forming a group similar to the EITF instead (a position advocated by FEI's CPC-S in its own letter earlier this year, as noted above).

The National Conference of CPA Practitioners (NCCPAP) also weighs in, stating:

Based on our collective experience and knowledge of the profession, we feel that a separate, autonomous regulatory standard setting body is the only acceptable answer to address these issues. The body should come under the jurisdiction of the FAF without the need for FASB approval.

Short-term actions taking place
As the FAF continues to review comment letters and conduct additional outreach to constituents as it deliberates this issue, as previously reported, FASB committed to taking a number of short-term steps, including some recommended by the Blue Ribbon Panel, to enhance its consideration of private company concerns.

One such step includes convening public roundtables to get input specifically from private companies, such as those announced for October, which we reported on here.

FASB Invites Private Cos. to Public Roundtable

FASB issued a call yesterday for representatives from private companies to speak at public roundtables on "issues relating to existing private company accounting and reporting standards." Separately, FEI launched a program earlier this year called the "Private Company Roundtable."

Private Co. Input Sought on Need For Differention in Existing GAAP
Two such roundtables seeking private company input on existing GAAP will be convened, on October 11 in Chicago, and October 17 in San Francisco. The purpose of the October roundtables, following on similar roundtables held last year, was described by FASB Chairman Leslie Seidman in FASB's press release as follows:

to engage in a constructive dialogue about private company accounting and reporting issues on existing GAAP with a wide variety of stakeholders, including private companies, their CPA practitioners, and users of private company financial statements

Seidman added:

The [FASB] Board and staff found that the two roundtables we held last fall were valuable forums for hearing first hand from private company constituents about their concerns with existing GAAP. Those roundtables provided the impetus for our efforts to develop a differential reporting framework for private companies and our project to simplify goodwill impairment assessments.

VIEs, Swaps, Fair Value Among Topics
Topics to be addressed at FASB's October roundtables, according to the board, "are expected to include, but will not be limited to, accounting and disclosure requirements relating to:
- variable interest entities,
- interest rate swaps, and
- level 3 fair value measurements

Private company stakeholders (preparers, auditors, users of private company financial statements, and others) interested in being considered as a participant in FASB's October roundtables need to complete this online application form by September 13.

Join FEI's Private Company Roundtable
Speaking of 'roundtables' and private companies, Financial Executives International, an association of senior financial executives, launched an outreach program last year called the "Private Company Roundtable" (PCR).

The PCR, building on the success of FEI's Committee on Private Company Policy, and Committee on Private Company Standards, has met with great success in providing an avenue for private companies to participate in educational, networking, and advocacy opportunities, through conference calls, webcasts and an upcoming Town Hall meeting.

The PCR is open to all interested FEI members, whereas membership in CPC-P, CPC-S and FEI's other national technical committees is more limited.

Participants in FEI's Private Company Roundtable can:
- Join fellow members in quarterly conference calls to discuss important private company topics and hear from high-ranking government officials and technical experts.
- Receive initiations to participate in discussions regarding finance policy issues and critical-interest topics with Congressional members, Administration officials, and senior staffers.
- Provide feedback on business operations and the potential business impact of policies to assist FEI in the formulation of policy positions and strategic education and advocacy efforts.
- Offer support on critical issues through targeted correspondence to policy-makers regarding information that is timely and pertinent to private companies.

FEI Private Company Roundtable's Townhall Sept. 26;
FEI Washington Policy Conference Sept. 26-27
FEI's Private Company Roundtable is hosting its inaugural in-person Town Hall meeting on September 26, in advance of the 2nd annual FEI Washington Policy Conference (of interest to public companies and private companies) on Sept. 26-27. Read more about these programs here.

FEI Private Co. Town Hall Sept. 26; Washington Policy Conf. Sept. 26-27

On Monday, September 26, 2011, FEI's Private Company Roundtable will host an in-person Town Hall meeting in conjunction with FEI's Washington Policy Conference in Washington, D.C.

FEI's Private Company Roundtable was established to provide a forum for members from private companies to network and discuss private company finance issues. During the past year, the Private Company Roundtable has met virtually, by conference call, and hosted numerous speakers from policy making positions on Capitol Hill.

The upcoming Town Hall meeting will be the first in-person meeting of the Private Company Roundtable. Set to take place from 2:00pm-5:00pm on September 26, the Town Hall meeting will include high-level policy speakers and an opportunity to meet, dialogue, and network with fellow FEI Private Company Roundtable members.

For those members of the Private Company Roundtable that are interested in arriving to Washington early on September 26th, FEI is planning meetings on Capitol Hill, as well as an optional lunch to round out the visit.

Oxley, Blanchard, Castle, Malek Keynote Washington Policy Conference
Following the PCR Town Hall meeting, a reception will kick-off FEI's Washington Policy Conference on the evening of September 26, continuing with a full day of programming on September 27th.

The 2nd annual Washington Policy Conference, of interest to public company and private company financial executives, brings together key business and government leaders to provide insight into policy questions facing senior financial executives and their companies.

Topics include the policy impacts of reigning in the deficit, prospects of fundamental tax reform and the impact of new legislation and regulations currently being debated.

Keynote speakers at FEI's Washington Policy Conference include Mike Oxley, former Chairman of the House Financial Services Committee; Fred Malek, former President of Marriott Hotels and Northwest Airlines; Mike Castle, former Member of Congress (R-DE) and former Governor of Delaware; and James Blanchard, former Member of Congress (D-MI) and former Governor of Michigan.

Learn more about FEI membership; see the detailed agenda and register for:
FEI's Private Company Roundtable Town Hall, Sept. 26, Washington DC
FEI's Washington Policy Conference, Sept. 26-27, Washington DC

Disclosure Framework, Improving, Integrating Certain FASB, SEC Disclosure Requirements, On Deck for FASB Ed Session This Week

The Financial Accounting Standards Board (FASB) will pick up its discussion of its Disclosure Framework project at an Education Session (Ed session) this Wednesday, August 3. FASB began webcasting its Ed sessions earlier this year, and although no votes are taken, they provide a glimpse of what's on deck for formal discussion at a future FASB board meeting, generally the meeting held the following week. (This week's FASB board meeting, to be held Friday, is on the proposed Accounting Standards Update on Consolidation: Investment Companies.)

Objective: Improve, Integrate GAAP, MD&A Disclosures
As noted in FASB's project summary of the Disclosure Framework project:

The objectives of this project are to (1) establish an overarching framework intended to make financial statement disclosures more effective and coordinated and (2) seek ways to better integrate information provided in financial statements, Management Discussion & Analysis (MD&A), and other parts of a reporting entity’s financial reporting package. The project objective is not intended to be additive but, rather, to develop a framework for improved U.S. Generally Accepted Accounting Principles (GAAP) that promotes meaningful communication and logical presentation of disclosures and avoids unnecessary repetition.

Roots of Project in SEC's Pozen Committee; ITAC

The genesis of the Disclosure Framework project, as also noted in FASB's project summary, was to:

establis[h] an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant. The project was
added in response to requests and recommendations received from several constituents, including the Investors Technical Advisory Committee (ITAC) and the Securities and Exchange Commission’s (SEC) Advisory Committee on Improvements to Financial Reporting (Recommendations 1.2 and 1.3).

The above-named SEC advisory committee, abbreviated CIFiR, and chaired by Robert Pozen, was informally referred to as the Pozen Committee. Today happens to be the third anniversary of the Pozen Committee's report & recommendations; in honor of the Aug. 1 anniversary of that report (and, we understand, (according to wikipedia!) Mr. Pozen's upcoming birthday on Aug. 8), we are pleased to post as a tribute to that committee, the music video, shown above, Hey There Bob Pozen.