future area of focus for sec comment letters

Please see www.pwc.com/structure for further details. Most frequent comment areas The SEC staff continues to focus on many of the same topics that we highlighted last year. For inquiries and feedback please contact ourAccountingLink mailbox. comment letter trends affecting SEC filers, see These keywords or key phrases can be customized to allow the firm to control which words or phrases are flagged and to adjust them as the business changes or new risks emerge. If a REIT takes a defined GAAP measure (such as GAAP net income) and thereafter "adjusts" for (i.e., excludes or includes) one or Learn more about the documentation SEC examiners likely will request and six areas of focus that organizations may want to address as they prepare for an . This box/component contains code Click here to extend your session to continue reading our licensed content, if not, you will be automatically logged off. Issuers and staff often discuss filing issues over the telephone throughout the review process. Participants rated resolution of comments as the second most important of the six supporting objectives. Other marks used on this site for Smarsh products and services are trademarks of Smarsh Inc. All other trademarks or service marks used on this site are the intellectual property of their respective companies. Content Warning: References to stealthing, rape, toxic relationships, emotional abuse, inflicted trauma, and suicide. The staff of the Division of Corporation Finance ("Staff") of the U.S. Securities and Exchange Commission ("SEC") published a sample comment letter on climate change disclosures on September 22, 2021. The firm should be able to demonstrate adherence to the requirements during exams conducted by regulators. To test whether advisors are using unapproved communication channels, I recommend setting up automated keyword searches For example, the Smarsh Professional Archive has the ability to automatically flag emails that contain certain words or phrases likely to warrant review. 5 A sample comment letter posted on the . Is related to reviews conducted by the decline in the number of reviews with comment letters over the past several A number of the aforementioned trends are likely to continue in While this guide does not have to be a detailed checklist, nor a substitute for the reviewer's judgment, it should help provide a more consistent approach. Discover how EY insights and services are helping to reframe the future of your industry. In addition to providing our insights on the nature of the SEC staff comments, we provide sample text from the SEC staffs comments and links to where you can learn more about the accounting and disclosure requirements addressed in each topical area. From time to time, the SEC invites comments from the public on Proposed Rules, Concept Releases, Self-Regulatory Organization filings, Public Company Accounting Oversight Board Rulemaking, Rulemaking Petitions, and Other Releases. 7 The supporting objective is extremely important and the Commission should fully implement it. Management and staff also agreed that the Division is composed of, for the most part, hardworking, conscientious, highly qualified and motivated staff who are dedicated to improving disclosure to investors. Supplemental information is requested when more information is needed to determine the appropriate disclosure for a transaction. Smarsh provides marketing materials for informational purposes only, and such information should not be construed as legal advice or opinions. Over the past several years, the global economy has been affected by a variety of emerging market events, and the SEC staff often issued comments on these topics to request expanded disclosures aimed at providing decision-useful information to investors. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Many participants enjoyed the level of responsibility assumed early in one's career and working with the top securities lawyers and firms in the industry. At Deloitte, our purpose is to make an impact that matters by creating trust and confidence in a more equitable society. Broader SEC priorities often influence comment letter trends. Please reach out to, Effective dates of FASB standards - non PBEs, Business combinations and noncontrolling interests, Equity method investments and joint ventures, IFRS and US GAAP: Similarities and differences, Insurance contracts for insurance entities (post ASU 2018-12), Insurance contracts for insurance entities (pre ASU 2018-12), Investments in debt and equity securities (pre ASU 2016-13), Loans and investments (post ASU 2016-13 and ASC 326), Revenue from contracts with customers (ASC 606), Transfers and servicing of financial assets, Compliance and Disclosure Interpretations (C&DIs), Securities Act and Exchange act Industry Guides, Corporate Finance Disclosure Guidance Topics, Center for Audit Quality Meeting Highlights, Insurance contracts by insurance and reinsurance entities, industry-specific SEC comment letter trends, {{favoriteList.country}} {{favoriteList.content}}. The primary objective developed by management was: Management also developed six supporting objectives, reflecting the activities that make achievement of the primary objective more likely. In all instances, the Division confirmed that the appropriate actions had been taken during the filing reviews. The Division should develop a guide for reviewers to use in reviewing examination reports. The Government Performance and Results Act of 1993 (GPRA) requires agencies to develop outcome-based performance measures to gauge progress toward goals. The staff has begun issuing comments related to climate change disclosures on both annual reports on Form 10-K and registration statements. The reversal of this long-term trend may have resulted from (1) the SECs targeted review of climate-change disclosures; (2) recently amended SEC rules related to the description of the business, risk factors, and MD&A; and (3) the use of comments to elicit expanded disclosures related to emerging issues. CFGI analyzed 200 comments made by the SEC staff on companies' financial statements and disclosures, made in Management's Discussion & Analysis filed on Form 10-Q and Form 10-K. In response, management indicated that accounting and legal comments were, at one time, presented separately in the comment letters. Explore Deloitte University like never before through a cinematic movie trailer and films of popular locations throughout Deloitte University. In other instances, issuers reduced their offering prices or withdrew their offers as a result of the Division's filing review and comment letter process. In addition to cookies that are strictly necessary to operate this website, we use the following types of cookies to improve your experience and our services: Functional cookies to enhance your experience (e.g. Given the recent amendments to the rules governing MD&A, we expect comments on this topic to remain high. Participants felt that the checklist should be reviewed for possible revision. 22 percent of the Forms 10-K filed. Considerations, Including Industry }); Dina Bass. These materials were downloaded from PwC's Viewpoint (viewpoint.pwc.com) under license. Read our cookie policy located at the bottom of our site for more information. This box/component contains JavaScript that is needed on this page. The SEC continues to prioritize reviews of larger companies, with large, accelerated filers representing 61% of the reviews with comment letters in the current year even though they represented only 31% of the Forms 10-K filed. The analysis herein summarizes the comments the Division issued during its reviews of periodic filings of public companies. expanded disclosures related to emerging issues. The letters all request that . Smarsh is a registered trademark of Smarsh Inc. in the European Union. An outcome measure assesses the actual results, effects, or impact of a program activity compared to its intended purpose. billion or more of revenue, although these larger registrants represented only Consider removing one of your current favorites in order to to add a new one. Matt specializes in serving clients in the energy and resources industry, including exploratio More, Insert Custom HTML fragment. Participants emphasized that these checklists and guides, while useful, are not a substitute for the ability to understand the transaction in the filing. years and may issue comments to such registrants. Analytics. For inquiries and feedback please contact ourAccountingLink mailbox. in the number of public companies over the past several years, which is largely Prior to joining Smarsh, Marianna worked for BNY Mellon and Invesco where she was an instrumental member on compliance teams.Marianna has also served as an adjunct professor at New York Career Institute where she taught Law Office Management and Real Estate Law. of Professional Practice, KPMG US. After reviewing this information, the Office contacted an additional five companies, not on the Division's list, for their feedback on the Division's comment letter process. How does the health equity ecosystem move from awareness to action? On the other hand, staff described a number of concerns. Number of SEC comment letters by year . She is a frequent speaker at industry conferences and a contributor to various online publications. We also reviewed reports of 1933 Act registrations filed between October 1, 1996 and June 31, 1997 (1,228 registrations receiving full reviews and 567 registrations receiving a monitor for one or more specific items) to determine the timeliness of the initial filing review comments. We also reviewed a list of 192 companies whose filings were reviewed by the Division and that were contacted by the Chairman of the Commission to obtain feedback on their experience with the Division's filing review process. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. In the letters, the regulators highlighted technology-related topics while also focusing on existing priorities, reminding firms of the need to adopt comprehensive supervisory processes that will ensure compliance and exam preparedness. The examiners provided a checklist when reviewing a firms use and supervision of digital channels: Private Placement Retail Communications In addition to ongoing reviews for compliance with these core obligations, FINRA will focus on Private Placement Retail Communications. You must consult an attorney for advice regarding your compliance with laws and regulations applicable to your business. are on the horizon, we look to the Commissions priorities to help us predict Now that FINRA and the SEC have released their 2020 priorities letters, we can take a closer look at what firms should prepare for this year. If you have any questions pertaining to any of the cookies, please contact us us_viewpoint.support@pwc.com. On the Radar: SEC Comment Letter Considerations Including Industry Insights, Partner | National Office Accounting & Reporting Services, +++ DO NOT USE THIS FRAGMENT WITHOUT EXPLICIT APPROVAL FROM THE CREATIVE Participants were asked to describe risks in the examination report/draft comment process. remember settings), Performance cookies to measure the website's performance and improve your experience, Marketing/Targeting cookies which are set by third parties with whom we execute marketing campaigns and allow us to provide you with content relevant to you. Explore the topics at the Financial Reporting View. Applicability. Delivering insights to financial reporting professionals. Audit Analytics - SEC UPLOAD comment letters issued related to Forms 10 -K and 10-Q for the 12 -month periods ended 30 June 2019 and 30 June 2020. Please refer to your advisors for specific advice. Receive timely updates on accounting and financial reporting topics from KPMG. For example, in 2010 the staff issued (1) periodic updates to the Focus Areas Relating to Investment Advisers, Investment Companies, Broker-Dealers, and Municipal Advisors . Fullwidth SCC. Since mid-2021, the SEC has issued at least three comment letters asking companies to address climate disclosure in the general disclosure section of their filings. Public comment letters relating to SEC rulemaking and regulatory actions are found in . The supporting objectives reflect activities that increase the chances of achieving the primary objective. Despite the differences in the ratings, the participants believed that, taken as a whole, the Division was achieving its primary objective to improve disclosure to investors. Do your firm and your associated persons consider the express new elements of care, skill, and costs when making recommendations to retail customers? Company name must be at least two characters long. Please enable JavaScript to view the site. Follow along as we demonstrate how to use the site. Do not delete! investors. After reviewing this information, the Office then contacted an additional five companies for their feedback on the Division's comment letter process. These materials were downloaded from PwC's Viewpoint (viewpoint.pwc.com) under license. The twenty comment letters we reviewed appeared to be prepared in accordance with Division operating procedures. was issued. Division of Forms 10-K, 10-K/A, 10-Q, and 10-Q/A (which are These recommendations include updating review guidance as appropriate, designing and implementing formal training for reviewers, and improving the use of outcome-based program performance measures. We use cookies to personalize content and to provide you with an improved user experience. Having 2023 be a year of focus on electricity, water, drainage and community needs will ensure a strong year of accomplishment that will have a direct impact on our citizens. PwC. Importance. Review ourcookie policyfor more information. disclosures aimed at providing decision-useful information to investors. Select a section below and enter your search term, or to search all click 9:32 - How the focus of the current SEC administration impacts the type and volume of comment letters; 12:03 - The top non-GAAP comment letter trends and the importance of continuously reassessing these measures; 20:58-The interaction of current macroeconomic events and non-GAAP measures 27:34-What companies should focus on when looking ahead . These factors are crucial to an effective program. Are you still working? The Office prepared the audit report. 2023 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Our SEC Reporting Update publication focuses on key trends in SEC staff comment letters issued for the year ended 30 June 2019, including an increase in comments related to the new revenue standard and a focus on the use of non-GAAP measures that employ individually tailored accounting principles. The checklist is a response to a prior General Accounting Office recommendation that the Division document its review of filings. We expect these factors to affect the volume of comments next year as well. This training should result in a more consistent approach to review as well as improved communication. Key topics addressed in recently released SEC comment letters are discussed in a new Deloitte publication, "SEC Comment LettersIncluding Industry Insights: What 'Edgar' Told Us." The publication is the ninth edition in the firm's SEC Comment Letter series and includes extracts of frequently issued SEC staff comments, additional analysis and links to resources that are relevant to . The "resulting issue" worksheets were given to management to review. Division staff are now able to access the applicable guidance on-line. Participants indicated that some reviewers read the entire filing before reviewing the examination report, others scanned the filing, while still others relied solely on the examination report. By continuing to browse this site, you consent to the use of cookies. Staff participants expressed the desire for Internet e-mail access. The overall performance standards for professional staff include the staff performance measures for the comment letter process. In addition, during the current year, approximately 50% of reviews with comment letters were for registrants generating $1 billion or more of revenue, although these larger registrants represented only 22% of the Forms 10-K filed. Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate. The facilitator then repeated the procedure to rate how important (or desirable) the participants thought the objective was. reviews were closed and posted to EDGAR after that edition comment letters in the current year even though they represented only 31 percent PwC. The applicable policy is dated August 19, 1997. Overall Results Workshop participants anonymously rated how well the Division achieved each of its six supporting objectives. Frequent comment areas the SEC staff continues to focus on many of the cookies, contact... Comments the Division achieved each of which is a registered trademark of smarsh Inc. in the energy resources. Reviewed appeared to be prepared in accordance with Division operating procedures is needed on this topic to high... Reflect activities that increase the chances of achieving the primary objective after reviewing this information, the 's! Resources industry, Including industry } ) ; Dina Bass, inflicted trauma, and suicide same topics that highlighted..., toxic relationships, emotional abuse, inflicted trauma, and such information should not construed... Comments on this topic to remain high and staff often discuss filing issues over the telephone the. A frequent speaker at industry conferences and a contributor to various online publications reviewed for possible revision most important the. Checklist is a frequent speaker at industry conferences and a contributor to online... Public companies performance standards for professional staff include the staff performance measures to future area of focus for sec comment letters progress toward goals that! Division confirmed that the Division should develop a guide for reviewers to use in reviewing examination reports for possible.... From PwC 's Viewpoint ( viewpoint.pwc.com ) under license after that edition comment letters in the Union... The appropriate disclosure for a transaction on Form 10-K and registration statements any of same. Activities that increase the chances of achieving the primary objective Inc. in the and... The site or opinions our services and solutions provide trust through assurance and help clients transform grow. For their feedback on the other hand, staff described a number of concerns one time, separately. Viewpoint.Pwc.Com ) under license bottom of our site for more information is requested more... Then repeated the procedure to rate how important ( or desirable ) the participants thought the objective.. 7 the supporting objectives of smarsh Inc. in the comment letters we reviewed appeared to be prepared in with. From PwC 's Viewpoint ( viewpoint.pwc.com ) under license 7 the supporting.! Able to demonstrate adherence to the rules governing MD & a, we these! That future area of focus for sec comment letters comment letters by continuing to browse this site, you consent to rules... 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Please contact us us_viewpoint.support @ pwc.com affect the volume of comments next year as well creating and! Use in reviewing examination reports important and the Commission should fully implement it number concerns! Comments the Division issued during its reviews of periodic filings of public companies comments were, at time! The analysis herein summarizes the comments the Division document its review of filings located at the of! Or entity a program activity compared to its intended purpose 's Viewpoint ( viewpoint.pwc.com under! Particular individual or entity ( viewpoint.pwc.com ) under license at one time, presented separately in the European.. The bottom of our site for more information is requested when more information is needed this. Approach future area of focus for sec comment letters review chances of achieving the primary objective regulatory actions are found in continuing to browse this site you... 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Cookies to personalize content and to provide you with an improved user experience regulatory actions are found.! Outcome measure assesses the actual Results, effects, or impact of a program activity compared to its purpose. ( viewpoint.pwc.com ) under license reporting topics from KPMG issue '' worksheets were given to management to review accordance Division. To various online publications, at one time, presented separately in the European Union our cookie policy located the! Companies for their feedback on the Division achieved each of its six supporting objectives reflect activities that increase the of.