December 11, 2017

PCAOB: Makeover Edition

Recently, I blogged the rumor that SEC Chair Clayton would tap Senate staffer Bill Duhnke as the next PCAOB Chair. According to this WSJ article, that not only appears true – but Chair Clayton also plans to name several other PCAOB Board Members too. Here’s an excerpt from the article:

SEC Chairman Jay Clayton has picked several members including Mr. Duhnke to join the PCAOB, according to people familiar with the matter. Mr. Clayton and the SEC’s two other commissioners are likely to vote on the nominees in the next several weeks, the people said. The names of the other nominees couldn’t be learned.

The near-wholesale replacement of the audit watchdog’s board follows a period during which SEC officials sometimes publicly chastised the PCAOB for the slow pace of its rule making. Mr. Doty, a former SEC general counsel who took over the PCAOB in 2011, pushed rules that forced auditors to disclose more about what they do.

Interestingly, when I ran my blog about the rumor, I ran a poll about whether our community believes that the PCAOB Chair needs extensive auditing experience – the poll results are: 41% believe deep experience would be a good thing; 34% believe a lack of experience would be a good thing; and 15% say it could go either way…

Revenue Recognition: 21 Corp Fin Comments

Recently, as noted in this memo, FEI found a total of 21 Corp Fin comment letters that asked about revenue recognition practices and found these trends:

1. Early adopters have been asked to clarify considerations made for operationalizing different aspects of the standard
2. The SEC began requesting more robust SAB 74 disclosures for periods ending December 31, 2016
3. Several companies have disclosed incorrect effective dates for ASC 606 in their SAB 74 disclosures

Broc Romanek