On April 3, 2020, the SEC’s Chief Accountant, Sagar Teotia, issued a Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19 (the “OCA Statement”). The OCA Statement emphasizes that while the SEC Office of the Chief Accountant (“OCA”) appreciates the challenging environment that companies and their auditors face in attempting to comply with their financial reporting obligations due to COVID-19[1], and will not second-guess their reasonable judgments, OCA expects financial reporting to continue to “provide investors with high-quality financial information.” The OCA Statement also reaffirms OCA’s views on the importance of gatekeepers by pointing out the critical need for auditor independence in this uncertain economic environment. In addition to this general theme, the OCA Statement contains several notable points that will have implications for companies in the current situation, both in preparing their financial statements, and in taking steps to mitigate litigation and enforcement risk.
Continue Reading SEC Chief Accountant Weighs in on Accounting Issues During the COVID-19 Outbreak
Sandra Flow
SEC Maintains the Status Quo on Climate Change Disclosures
By Sandra Flow, Nick Grabar, Jeffrey D. Karpf & Rosa Parmose on
Last week the Securities and Exchange Commission Chair Clayton and Commissioners Lee and Peirce each issued statements on climate-related disclosures in SEC filings. The statements were prompted by the concurrent SEC’s proposal to amend the MD&A rules and evidence some debate within the SEC on this topic, which has attracted considerable recent attention among investors,…
SEC Zeroes in on MD&A Disclosures
By Sandra Flow, Nick Grabar, Jeffrey D. Karpf, Julian Cardona & Elena Vespoli on
Yesterday the Securities and Exchange Commission took two significant actions relating to the MD&A disclosures in annual and quarterly reports of public companies.
First, it proposed amendments to MD&A requirements that would, if adopted, make significant and long-overdue improvements to a central disclosure requirement of the U.S. securities laws. Second, it issued guidance on the…
SEC Announces Enforcement Cases on Public Company Internal Controls
By Alejandro Canelas Fernandez, Sandra Flow, Nick Grabar, Alex Janghorbani & Tapan R. Oza on
On January 29, 2019, the SEC announced four settlements with publicly-traded companies for failure to maintain adequate internal control over financial reporting.
None of the companies was charged with making false or inaccurate statements, either about its ICFR or otherwise; indeed, each had repeatedly disclosed material weaknesses in ICFR over many years.
These cases are…