March 15, 2022

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FASB Continues Discussion on Insurance Contracts Project

As reported in its "Summary of Board Decisions" publication, the FASB met on March 6, 2013, and discussed its proposed insurance contracts standard. The FASB discussed: (a) the treatment of changes in estimated interest crediting and accretion rates; and (b) election of the fair value option; and (c) other miscellaneous issues. The FASB reached a number of decisions on disclosures to be made (detailed in the Summary of Board Decisions) during this meeting, including the following:

The FASB affirmed its tentative decision from its November 2012 meeting that an insurer would not be required to disaggregate cash flows of a contract into those affected by returns from assets and those not affected by returns from assets when determining discount rates that reflect the characteristics of the contract’s cash flows.

The FASB decided to eliminate the fair value option election for guarantees and other contingencies accounted for in accordance with Topic 460, Guarantees, or contingencies accounted for in accordance with Topic 450, Contingencies, that will not be within the scope of the forthcoming proposed insurance contracts guidance.

The FASB decided to eliminate the fair value option in paragraph 825-10-15-4(d) through (e) related to rights and obligations under an insurance contract and obligations under a warranty that currently are accounted for under Topic 944, Financial Services-Insurance, or would be accounted for in accordance with the forthcoming proposed insurance contracts guidance.

The FASB decided to eliminate the fair value option election for written loan commitments in paragraph 825-10-15-4(c).

See Summary of Board Decisions here.

The IIA Releases White Paper

The Institute of Internal Auditors (IIA), together with Robert Half, has released a white paper, Succeeding as a 21st Century Internal Auditor: 7 Attributes of Highly Effective Internal Auditors. According to the IIA, the intent of this paper is to flush out the “soft skills are the new hard skills” belief with insights, experiences and details culled from actual experiences in the field. After briefly characterizing the current state of internal audit’s evolution, the paper shares these field insights for helping future internal audit managers and executives understand how they can strengthen their capabilities in the coming months and years.

This paper is authored by Richard F. Chambers and Paul McDonald. Mr. Chambers is the President and Chief Executive Officer of the IIA. Mr. McDonald is the Senior Executive Director at Robert Half International.

This paper is available from the IIA here.

Jeffrey W. Rubin Appointed to the FAF

The Financial Accounting Foundation (FAF) announced that Jeffrey W. Rubin has been appointed as its vice president and general counsel. Mr. Rubin will provide strategic legal advice and guidance to the FAF, which oversees the FASB and the GASB.

Prior to joining the FAF, Mr. Rubin was a partner at Hogan Lovells US LLP, where his practice focused on domestic and international securities transactions, corporate finance transactions, private equity, venture capital, and corporate governance.  He served as chair of the American Bar Association’s Federal Regulation of Securities Committee from 2009 to 2012, and previously served as chair of the New York State Bar Association’s Securities Regulation Committee. In addition, Mr. Rubin served as a member of the American Bar Association’s Task Force on Financial Markets Regulatory Reform, whose purpose was to study and analyze legal and regulatory implications of financial crises.

The FAF’s News Release is available here.

Steven Harris and Jay Hanson Reappointed to PCAOB

The SEC announced that PCAOB members Steven B. Harris and Jay D. Hanson have been reappointed for five-year terms. Mr. Harris is reappointed to a second term ending Oct. 24, 2017, and Mr. Hanson is reappointed to a second term ending Oct. 24, 2018.

Mr. Harris was appointed to the PCAOB in 2008. He was previously Senior Vice President and Special Counsel for APCO Worldwide, where he advised clients on matters relating to financial transactions, corporate governance, crisis management, investigations, foreign investment, trade promotion, and government affairs.

Mr. Hanson was appointed to the PCAOB in 2011. He previously spent nearly 32 years at McGladrey & Pullen LLP, where he worked with a variety of clients ranging from small nonprofit organizations to large multi-national public companies.

The SEC selects members and the chair of the PCAOB after consultation with the Treasury Department and the Federal Reserve Board.

A news release on this matter is available from the SEC here.

Confirmation Hearing for Mary Jo White Concludes

The United States Senate Committee on Banking, Housing, and Urban Affairs (the Committee) held a confirmation hearing for Mary Jo White on March 12, 2013. Ms. White was nominated by President Barack Obama to be a member of the SEC and is expected to serve as the chairman if confirmed by the Senate. The confirmation hearing lasted less than two hours with Ms. White promising “fair but bold and unrelenting” enforcement of securities laws if confirmed. It did not appear that Ms. White faced much resistance from any of the Committee members based on their questioning.

The hearing also included the nomination of Richard Cordray to be Director of the Consumer Financial Protection Bureau (CFPB). The CFPB was established through the Dodd-Frank Act to protect consumers by carrying out federal consumer financial laws.

Further information on the hearing, including an archive of the hearing and prepared testimony, is available here.

Our strategic partnership with CCH, a Wolters Kluwer business, has enabled us to craft our Audit & Accounting eAlert. The articles have been selected from CCH’s Accounting Research Manager Daily and/or Weekly Summary and we hope you find them valuable and relevant. Please feel free to contact ParenteBeard LLC at if you have any questions related to these stories or ParenteBeard's services.

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