Practising Law Institute

Practising Law Institute is a nonprofit learning organization dedicated to keeping attorneys and other professionals at the forefront of knowledge and expertise. PLI is chartered by the Regents of the University of the State of New York, and was founded in 1933 by Harold P. Seligson. The organization provides the highest quality, accredited, continuing legal and professional education programs in a variety of formats which are delivered by more than 4,000 volunteer faculty including prominent lawyers, judges, investment bankers, accountants, corporate counsel, and U.S. and international government regulators. PLI publishes a comprehensive library of Treatises, Course Handbooks, Answer Books and Journals also available through the PLI PLUS online platform. The essence of PLI’s mission is a commitment to the pro bono community, with over 98,000 program scholarships awarded in 2017.

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The staff in the SEC’s Office of the Chief Accountant recently provided their insights on a number of issues based on recent consultations with companies, their auditors and other groups within the SEC.  They shared these observations in speeches which you can find on this section of the SEC’s webpage. The issued discussed by the OCA staff included: Internal control over financial reporting (“ICFR”) – evaluation of control deficiencies. Internal control over financial reporting…
At the AICPA’s December conference, Chief Accountant Wesley Bricker’s remarks included a suggestion that this Statement would be valuable reading for professionals involved in the reporting process.  The Statement includes a summary of recent OCA activities, reviews priorities such as fostering ICFR and exercising effective oversight over accounting and auditing standard setting, and also discusses the OCA consultation process. In addition to providing the Statement, Mr. Bricker and Chair Clayton also displayed and emphasized the…
Materiality is always one of the most complex judgments we make.  You can check out some background in these earlier posts about materiality considerations, SAB 99 and related issues. As a year-end thought, here is a March 2018 comment about materiality judgments: Note 1 – Organization and Summary of Significant Accounting Policies, page 43 We note that in fiscal 2017 you revised your March 31, 2016 balance sheet for an error in the historical carrying…
One area where companies have not received many SEC comments – and, in all honesty, we don’t like to think about much – is market risk disclosures in Item 7A of Form 10-K and Part 1 – Item 3 in Form 10-Q.  In this time of more volatile markets this forward-looking disclosure about the extent of risk is becoming more important. We have recently seen three comment letters with questions about market risk disclosures.  In…
On December 26, 2018, the SEC levied a fine on a company that failed to follow the Regulation S-K Item 10 (e) guidance concerning the use of non-GAAP measures.  Specifically, the company did not present the most directly comparable GAAP measure with equal or greater prominence in the headline and highlights in two of its earnings releases. As you can read about here, the issue was aggravated because while the company touted increases in non-GAAP…
In this fourth post of our series discussing issues for year-end planning consideration, we are suggesting an area where you can start now to begin creating momentum for change. In his speech at the annual SEC/FASB/PCAOB conference, AICPA Chair Barry Melancon highlighted integrated reporting. Sustainability and integrated reporting were also the focus of a disclosure panel at the conference. You can find some background about integrated reporting on the AICPA’s webpage and on the International Integrated Reporting Council’s
In this third post of our year-end preparation series we are highlighting a planning area to incorporate in year-end now to hopefully avoid last-minute challenges next year.  Critical Audit Matters, or CAMs, will be discussed by your auditors in their reports for years ended on or after June 30, 2019 for Large Accelerated Filers and for years ended after December 15, 2020 for others. There has been significant discussion about the advantages of doing a…
Thanks to Pat Finnegan, who works with Fitch and has helped us as a workshop leader, for letting us know that CVS is another company that uses the direct method for their statement of cash flows in their Form 10-K. It is pretty neat and more understandable when we see line items such as “Cash receipts from customers” and “Cash paid for inventory and prescriptions dispensed by retail pharmacies” on the statement of cash…
In this second post of our series discussing areas to consider as we navigate our way through the year-end reporting process, we are focusing on the latest news from the PCAOB concerning the inspection process. As the new PCAOB Board continues to implement their strategic plan (you can read more about the plan here), how they will guide the inspection process has been addressed in an “Inspections Outlook” document issued on…
As we move through the calendar towards year-end or quarter-end, we are presenting a series of posts focusing on issues to consider as we navigate through the reporting process. This first post is a reminder to make sure to update your Form 10-K or Form 10-Q for the SEC’s Disclosure Update and Simplification Rule. The major areas to update include: Form 10-K changes: Item 1 – Changes to S-K Item 101 Item 5 – Changes to…