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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With the new Disclosure Modernization and Simplification Rule we blogged about yesterday going effective 30 days after publication in the Federal Register, we will all likely be scrambling a bit to get up-to-speed with these changes.  To help us along the path PLI will present a One-Hour Briefing on April 12, 2019 titled “Disclosure Effectiveness and Fast Act Amendments”. You can read about the briefing here. As always, your thoughts and comments are welcome!…
On March 20, 2019, the SEC continued modernizing and simplifying their disclosure rules as they adopted a final rule that will: Simplify disclosure and disclosure processes, Revise rules to update and streamline and improve the SEC’s disclosure framework,and Update other rules to account for developments since their adoption or amendment. The changes in the final rule include: Companies will generally be able to exclude discussion of the earliest of three years in MD&A if they…
At this point in the year-end process most of us have numbers in place and are working on the final steps in reporting.  As you move toward final reviews, we share with you Audit Analytics’ list of high-risk financial reporting areas that can hopefully help you avoid reporting problems. For the last 17 years Audit Analyticshas done an exhaustive review of public company restatements.  Their report “2017 Financial Restatements – A Seventeen Year Comparison”…
On December 11, 2018, the SEC announced settled chargesagainst a natural and organic food company, Hain Celestial Group.  The company’s problems began when members of the company’s finance group discovered that its sales organization had been offering unauthorized incentives to two major customers.  These incentives induced the customers to accept shipments near quarter-end that helped the sales department meet internal sales goals. When the finance department discovered these unauthorized practices they began an investigation…
In November and December 2018, SEC Chair Clayton, Chief Accountant Bricker and several other staff members discussed the use of S-X Rule 3-13 waivers.  These waivers may be appropriate when a mechanical application of rules like the significant subsidiary test yield results that may require costly disclosures that might not be material to investors.  All of the SEC speakers emphasized that such waivers require thorough analysis and are not automatic.  The SEC staff has processes…
As companies worked through the implementation of the new revenue recognition standard they dealt with two issues surrounding ICFR: What changes were required to ICFR for this new standard, and Whether or not these changes to ICFR required reporting a material change in ICFR. Reporting material changes in ICFR is a requirement in both Form 10-K and Form 10-Q and involves substantial amounts of judgment.  This postreviews the details of this requirement. As we…
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…