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BDO Assurance Practice SEC Newsletter - January 2014

Mon, 01/06/2014 - 12:00am
The annual AICPA National Conference on Current SEC and PCAOB Developments was held on December 9-11, 2013 in Washington, DC, where representatives of the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) shared their views on various accounting, reporting, and auditing matters. The remarks made by members of the Office of the Chief Accountant are available on the SEC’s website www.sec.gov, under News/Speeches.
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SEC Flash Report - January 2014

Fri, 01/03/2014 - 12:00am
On December 18th, the SEC proposed rule amendments required by Title IV of the JOBS Act. The proposed rules are intended to increase access to capital for smaller companies. The SEC proposed amendments to Regulation A to establish a streamlined process by which a private company could offer and sell up to $50 million of securities in a twelve-month period if it complies with certain reporting requirements. Currently, Regulation A permits an exemption from the registration process for public offerings by private companies of up to $5 million of securities in a twelve-month period. The offering document need not include audited financial statements but is subject to SEC staff review, as well as state-level registration and qualification requirements. Very few offerings have been made pursuant to Regulation A. A U.S. Government Accountability Office study identifies the costs and complexity of state law compliance as one of the reasons for this.
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BDO Assurance Practice SEC Newsletter - January 2014

Thu, 01/02/2014 - 12:00am
Entering 2013, the outlook for the Securities and Exchange Commission’s activities was uncertain. It was unclear how long the designated Chair, Elisse Walter, would remain in her position. The fifth seat on the Commission was unfilled, the Commission was split politically with two Democrats and two Republicans and it was deeply divided on certain issues. That changed in April when Mary Jo White became the 31st Chair of the SEC.
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FASB Flash Report - December 2013

Mon, 12/02/2013 - 12:00am

On November 25, 2013, the FASB endorsed the first two accounting alternatives for private entities. These are intended to simplify the accounting for goodwill and make it easier to apply hedge accounting to certain “plain-vanilla” interest rate swaps. The Board has indicated private entities will be able (but not required) to adopt the new standards for December 31, 2013 financial statements. The FASB will also consider similar potential changes for public entities in the future.

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SEC Flash Report - November 2013

Fri, 11/15/2013 - 12:00am
On October 30, 2013, the staff of the Securities and Exchange Commission's Division of Corporation Finance published a new edition of the Division's Financial Reporting Manual. The inside cover lists a summary of the paragraphs that were updated. Some of the updates only provide clarification or housekeeping changes to the existing guidance. However, certain other updates are noteworthy and are summarized in this SEC Flash Report.
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Fraud and Ethics External Resources

Fri, 11/15/2013 - 12:00am
SEC and DOJ Resource Guide to the U.S. Foreign Corrupt Practices Act
The Criminal Division of the U.S. DOJ and the Enforcement Division of the SEC has made available a resource guide pertaining to the U.S. Foreign Corrupt Practices Act (FCPA) that companies of all sizes may find helpful in navigating compliance with the FCPA.

SEC Sets Priorities for the 2014 National Examination Program
The (SEC’s) Office of Compliance Inspections and Examinations has published its National Examination Program (“NEP”) priorities for 2014 to communicate with investors and registrants about areas that are perceived by the staff to have heightened risk, and to support the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. These priorities are aligned with the SEC’s mission by seeking to improve compliance, prevent fraud, inform policy, and monitor firm-wide and systemic risk. For more information, view the SEC’s National Exam Program Priorities for 2014.

Responsibility for Deterring and Detecting Financial Statement Fraud
The Anti-Fraud Collaboration has released a publication “Closing the Expectation Gap in Deterring and Detecting Financial Statement Fraud: A Roundtable Summary,” which summarizes a roundtable discussion held in April 2013 with corporate directors, financial executives, external auditors, and internal auditors on expectations of each other’s roles in the deterrence and detection of financial reporting fraud.

SEC Targets Risk and Fraud
On July 2, 2013, the Securities and Exchange Commission (SEC) announced three new initiatives within its Division of Enforcement

Fraud Self-Assessment Tool
The March 2013 issue of Journal of Accountancy article “What are the risks?” highlights a fraud self-assessment tool designed by small business managers and CPAs for use by small businesses to evaluate fraud controls

The Anti-Fraud Collaboration
The Anti-Fraud Collaboration represents the collaborative efforts of the Center for Audit Quality, Financial Executives International, The Institute of Internal Auditors and the National Association of Corporate Directors, organizations that actively engage in efforts to mitigate the risks of financial reporting fraud.

 

EBP Commentator - Special Edition

Thu, 11/07/2013 - 12:00am
The Internal Revenue Service announced cost-of-living adjustments applicable to dollar limitations 
for pension plans and other items for tax year 2014. 
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2013 BDO Board Survey

Thu, 10/10/2013 - 12:00am
The responsibilities of corporate directors at publicly traded companies have never been greater. Dealing with regulatory changes to financial reporting requirements, addressing risk across the enterprise – whether it be in domestic operations, foreign markets or cyber space – and vigilantly managing executive compensation practices are a just a few of the issues that boards are wrestling with in 2013.
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2013 BDO Board Survey

Thu, 10/10/2013 - 12:00am

Conducted by the Corporate Governance Practice of BDO USA, the survey examined the opinions of corporate directors of public company boards regarding corporate governance issues.

XBRL Flash Report - October 2013 

Mon, 10/07/2013 - 12:00am
On Sept. 23, XBRL US held its fifth annual conference, Current Developments in XBRL Financial Reporting. The two-day conference provided a forum for XBRL preparers, auditors and service providers to hear from the experts in XBRL on the status of this initiative, which the SEC mandated beginning in 2009 and with which all public companies must comply. Below are summaries of the main conference sessions and five takeaways from those sessions that all public companies should be aware of. 
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Initial Offerings Newsletter - Fall 2013

Thu, 10/03/2013 - 12:00am
As we enter the final quarter of 2013, the market for initial public offerings (IPOs) of stock in the United States is the healthiest it has been in some time. Through September, there have been 152 IPOs on U.S. exchanges, an increase of better than 53  percent from the same time in 2012. After back-to-back quarters of heavy offering activity, the U.S. IPO market is on pace to reach 200 deals, a level reached just twice (2004, 2007) since 2000.*

* Renaissance Capital is the source for all historical data related to the number, size and returns of U.S. IPOs
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SEC Flash Report - September 2013

Mon, 09/23/2013 - 12:00am
On September 18, 2013, the SEC proposed a rule required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposal would amend Item 402 of Regulation S-K and require issuers to disclose certain information.
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Assurance Flash Report - September 2013

Tue, 09/17/2013 - 12:00am

As communicated in BDO’s Assurance Flash Report – May 2013, the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) issued the 2013 Internal Control – Integrated Framework (the “2013 Framework”) and related illustrative documents in May 2013 to replace the original 1992 Internal Control - Integrated Framework (the “1992 Framework”). The following frequently asked questions (“FAQs”) address the more significant provisions of the 2013 Framework that auditors and companies need to understand – particularly as it relates to public entities subject to SarbanesOxley (“SOX”) Section 404.

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Assurance Flash Report - September 2013

Wed, 09/11/2013 - 12:00am

BDO issued an Assurance Flash Report in July 2013 that addressed a number of frequently asked questions (“FAQs”) regarding the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) updated Internal Control – Integrated Framework (the “2013 Framework”). Those FAQs and related answers addressed topics including why COSO updated the original 1992 Framework (the “1992 Framework”), key changes including the 17 principles, and the effective date for the 2013 Framework.

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Assurance Flash Report - August 2013

Wed, 08/21/2013 - 12:00am

On August 13, 2013, the PCAOB proposed for public comment a new auditing standard, along with related amendments, to enhance the way auditors communicate with investors and other financial statement users about the audit. In addition, the PCAOB proposed a new related auditing standard on the auditor’s responsibilities for other information in an annual report.

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FASB Flash Report - August 2013

Thu, 08/08/2013 - 12:00am

On August 7, 2013, the FASB issued a proposed Accounting Standards Update (ASU) for public comment that would define a “public business entity.” That definition would determine whether a reporting entity is eligible for accounting alternatives developed by the Private Company Council (PCC). Specifically, the proposal would amend the ASC Master Glossary to include one definition of a public business entity for future use in U.S. GAAP. It would also be used to define the scope of FASB's draft Private Company Decision-Making Framework when that document is finalized. The deadline for submitting comments on the proposed ASU is September 20, 2013. Refer to the Electronic Feedback Form to provide comments on the Exposure Draft.

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Assurance Flash Report - July 2013

Wed, 07/17/2013 - 12:00am

As a follow on to our July 2013 Assurance Flash Report, we have added additional FAQs to address a number of considerations and express a point of view related to several aspects of COSO's updated Internal Control - Integrated Framework. These FAQs and related answers express a broader viewpoint than simply the use of the 2013 Framework for the purposes of Internal Control over External Financial Reporting. Specifically, they address questions being raised by a variety of interested parties beyond CFOs and Controllers, such as Audit Committee and Board members, Chief Audit Executives, General Counsels, and Operations officers.

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2013 BDO IPO Halftime Report

Mon, 07/08/2013 - 12:00am

Executive Summary

BDO Flash Report - June 2013

Wed, 06/26/2013 - 12:00am
In response to comments received from issuers, the NASDAQ Stock Market LLC (Nasdaq) has withdrawn its proposed rule change that would have required all listed companies to establish and maintain an internal audit function. The purpose of the rule change was to ensure management and the audit committee are provided with regular assessments of a company’s risk management processes and system of internal control.
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FASB Flash Report - June 2013

Wed, 06/12/2013 - 12:00am

On June 11, 2013, the American Institute of Certified Public Accountants (AICPA) released its 206-page Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs OR the framework), which is a new accounting framework option designed to help small businesses prepare streamlined, relevant financial reports. This special purpose framework is an “other comprehensive basis of accounting” (OCBOA) and is intended for smallerto medium-sized for-profit private companies that do not need U.S. generally accepted accounting principles (GAAP) financial statements. However, the framework is neither authoritative nor is its use required. The framework is available for immediate use by incorporated or unincorporated entities across various industries. Specific industry guidance is not included in the framework. The framework is not intended as a substitute for GAAP when GAAP-based financial statements are necessary, as determined by the management of a private company and its financial statement users.

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