The European Parliament has adopted an audit reform package, the draft Directive on Statutory Audit and the Regulation, with new requirements applicable to the statutory audit of public-interest entities. The new rules are intended to improve audit quality across the European Union (EU), improve competition in the audit market, prevent conflicts of interest, and ensure that auditors are key contributors to economic and financial stability.
The new rules require auditors in the EU to publish audit reports according to international auditing standards. For auditors of public-interest entities, such as banks, insurance companies and listed companies, the provisions require audit firms to provide shareholders and investors with a detailed understanding of what the auditor did and an overall assurance of the accuracy of the company’s accounts.
Significant requirements in the audit reform provisions include:
The audit package must be formally adopted by the Member States in the Council. The publication of the new rules in the Official Journal of the European Union is expected to occur in the second quarter of 2014.
A press release on the EU audit reform package is available here.
A Statement by the European Commission on the audit reforms is available here.
A subcommittee of the House Financial Services Committee has scheduled a hearing, “Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies.” The hearing is expected to take place on Wednesday, April 9, 2014, beginning at 10:00 AM in the Rayburn House Office Building in Washington, D.C.
Emerging Growth Companies are a new category of issuers created by the Jumpstart Our Business Startups Act (JOBS Act). The JOBS Act was signed into law by President Barack Obama on April 5, 2012, and is intended to increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies.
Information on the hearing is available here.
On March 31, 2014, SEC Chair Mary Jo White gave the keynote address at the SIFMA Compliance and Legal Society Annual Seminar. Ms. White discussed the importance of all-encompassing enforcement of the securities laws. Ms. White provided that such an all-encompassing approach should include “appropriate, but vigorous, use of criminal, civil, and regulatory tools to enforce the securities laws.” While acknowledging the importance of the examination function to regulatory compliance, Ms. White’s remarks focused on the enforcement function, including investigating and bring cases against wrongdoers. Among her remarks were:
The SEC named Jessica Kane as Deputy Director and Rebecca Olsen as Chief Counsel in its Office of Municipal Securities. According to the SEC, Ms. Kane has served as senior special counsel to the Director in the Office of Municipal Securities, where she has played a leading role on the municipal advisor registration rulemaking project and other municipal securities initiatives. She joined the SEC in 2007, where she worked on corporate securities disclosure matters in the Division of Corporation Finance from 2007 to 2012, and then worked in the SEC’s Office of Legislative and Intergovernmental Affairs from 2012 to 2013.
Ms. Olsen joined the Office of Municipal Securities in 2013, where she made notable contributions to the municipal advisor registration rulemaking project, reviewed Municipal Securities Rulemaking Board (MSRB) rulemaking, and consulted with the Division of Enforcement on municipal securities enforcement matters. Previously, Ms. Olsen spent more than 10 years at Ballard Spahr LLP, where she practiced primarily in the municipal securities area.
The SEC established a standalone Office of Municipal Securities pursuant to the Dodd-Frank Act to administer SEC rules on practices of broker-dealers, municipal advisors, investors, and issuers in the municipal securities area and to coordinate with the MSRB on rulemaking and enforcement actions. The Office of Municipal Securities advises the SEC and its various offices on policy matters, enforcement, and other issues affecting the municipal securities market and oversees MSRB rulemaking and the SEC’s municipal advisor registration program.
A news release on Ms. Kane is available from the SEC here.
A news release on Ms. Olsen is available from the SEC here.
Keith Higgins, Director of the SEC’s Division of Corporation Finance, gave the keynote address at the Angel Capital Association Summit held on March 28, 2014, in Washington, D.C. Mr. Higgins discussed the changing landscape for angel investing as a result of the SEC’s rulemaking under the Jumpstart Our Business Startups Act (JOBS Act). The JOBS Act was signed into law by President Barack Obama on April 5, 2012, and is intended to increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies.
Specific topics discussed by Mr. Higgins included:
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