In a statement issued in connection with the 2019 AICPA Conference on Current SEC and PCAOB Developments, SEC Chief Accountant Sagar Teotia highlighted key priorities for the Office of the Chief Accountant ("OCA").
Engagement with Stakeholders. Mr. Teotia emphasized the importance of consultations with domestic registrants and foreign private issuers. He said that these consultations reduce uncertainty concerning applicable accounting standards.
Oversight of FASB. Mr. Teotia highlighted several initiatives of the Financial Accounting Standards Board ("FASB") to improve accounting standards. These include initiatives on (i) "identifiable intangible assets and subsequent accounting for goodwill," (ii) distinguishing liabilities from equity and (iii) accounting issues related to the transition away from LIBOR. Mr. Teotia noted several recent measures taken by the OCA and FASB to improve accounting standards, such as the implementation of new revenue, credit losses and lease standards.
Oversight of the Public Company Accounting Oversight Board ("PCAOB"). Mr. Teotia described recent initiatives by PCAOB to improve independent audit quality. These include:
- increasing engagement with stakeholders;
- providing a series of staff guidance documents regarding the implementation of critical audit matters; and
- moving its quality control standard to its standard-setting agenda.
In addition, Mr. Teotia described OCA priorities including:
- enhancing international audit quality in order to strengthen the accuracy of financial statements;
- promoting effective internal control over financial reporting to ensure "reliable financial information"; and
- continuing to collaborate on the Strategic Hub for Innovation and Financial Technology to make information on new financial technologies more accessible.
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