SEC Reporting Update 2016: Executive Summary
From Dec 2015 presentation at Financial Accounting & Reporting Update
Venue: Philadelphia Hyatt Bellevue
Link to upcoming 2016 conferences where this topic will also be covered: 2016 Events
Speaker: Pat Woodbury is a Managing Director at FTI Consulting and is based in Washington, DC. Ms. Woodbury has more than 30 years of experience gained through consulting and at the Public Company Accounting Oversight Board (PCAOB), the U.S. Securities and Exchange Commission (SEC), in corporate financial management and public accounting. She provides expert, advisory consulting and investigative services related to technical accounting, auditing, financial reporting, professional responsibility, FCPA and other SEC related issues.
Pat led off the session with a discussion of the SEC organizational structure and a discussion of the renewed focus on financial reporting fraud. SEC Disclosure Effectiveness Initiative was created with the intent to update and modernize specific disclosure requirements, eliminate duplication, provide only material information.
Pat summarized the efforts of the SEC Enforcement Division including their aggressive firsts:
admission by an auditing firm
action against a Big 3 credit rating agency
first high frequency trading manipulation action
Enforcement’s priorities for the next year include a focus on complex financial products, gatekeepers, financial reporting and accounting fraud.
Pat went on to explain how the Enforcement Division will utilize technology (and data analytics) to better understand and root out fraud.
Pat’s summary of recent financial restatements included the following data:
The most recent restatement undermined reliance on previously-filed financial statements (i.e., an 8-K Item 4.02 was issued). Only about 30% of recent restatements fall into that category
The restatement affected three years of financial data. Companies on average had to go back only 1.5 years to correct financial statements
It typically takes companies on average only about a week to file restated financial statements.
Companies on average lose more than a quarter of their market value following a material financial restatement
Pat covered the evolution of Dodd-Frank. The Commission has now proposed or adopted over 90% of the rule-making. The final rules to be written are on a regulatory framework for over-the-counter derivatives and disclosures around executive compensation.
Link to upcoming 2016 conferences where this topic will also be covered: 2016 Events