February 21, 2008

Progress Report: SEC’s Advisory Committee on Improvements to Financial Reporting

Last week, the SEC’s “Advisory Committee on Improvements to Financial Reporting” published a progress report, which includes 12 recommendations for the SEC to consider – many of them important and some of them far-ranging. The key themes include: increasing emphasis on investor perspective in financial reporting system; consolidating process of setting and interpreting accounting standards; promoting design of more uniform and principles-based accounting standards; creating a disciplined framework for increased use of professional judgment; and taking steps to coordinate US GAAP with IFRS. The Advisory Committee will issue a final report (with final recommendations) later this year. Here is a statement from Chairman Cox – and memos analyzing the Progress Report are posted in our “Auditing Process” Practice Area.

Yesterday, the SEC posted these recommendations for public comment, as they have done with other advisory committees. Like other advisory committee reports, there is a short 30-day comment period – given the importance of the issues, don’t forget to weigh in.

E-Proxy: Broadridge’s Candid Assessment

Yesterday, Broadridge posted this interesting article about how e-proxy is faring, which consists of excerpts from five interviews with in-house folks that have recently been through the voluntary e-proxy process. For these five companies, the costs savings have been real, but there have been some “lessons learned” about usability – as aptly noted by Dominic Jones in his “IR Web Report.”

Ninety Law Firms Petition IRS on Section 162(m) Position

Last week’s webcast on the IRS’ recent Section 162(m) private letter ruling was a blockbuster (audio archive available now; transcript coming soon) during which Ken Griffin of the IRS noted that further guidance should be expected from the IRS soon. To help their cause, 90 law firms signed off on this letter that was sent to the IRS on Tuesday. Stay tuned…

Kudos to those individuals that work hard to get so many firms to sign off on anything. Even with the ability to quickly communicate by e-mail these days, it amazes me when these collaborative efforts on short notice get completed. It’s not an easy thing to do.

– Broc Romanek