April 5, 2022

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FASB Proposes Improvements to Reporting Discontinued Operations

The FASB has issued for public comment a proposal to improve financial reporting about discontinued operations of major business lines or major geographic areas of operations for public and private companies, and not-for-profit organizations. Proposed Accounting Standards Update (ASU), Presentation of Financial Statements (Topic 205)—Reporting Discontinued Operations, re-defines “discontinued operation” and would require organizations to provide additional disclosures about discontinued operations such as operating, investing and financing cash flows. Comments are due by August 30, 2013.

In addition to amending the definition of discontinued operations, the amendments in this proposed ASU would require additional disclosures about discontinued operations and other disposals of individually material components of an organization that do not qualify for discontinued operations presentation in the financial statements. The proposed amendments also would expand the disclosures about an organization’s continuing involvement with a discontinued operation. Those continuing involvement disclosures would be required until the results of operations of the discontinued operation are no longer separately presented in the statement where net income is reported (either in a single continuous statement of comprehensive income or into separate but consecutive statements).

The FASB’s News Release is available here.

The proposed ASU is available here.

The FASB’s In Focus on the proposal is available here.

IIA Releases Internal Audit Awareness Toolkit

The Institute of Internal Auditors (IIA) has developed the Building Awareness Toolkit, which includes creative ideas, sample programs, videos, tips, tools, and templates to help individuals, audit teams, and IIA chapters raise awareness and highlight the value of the internal audit activity.

The IIA hopes that these efforts help to dispel misperceptions of the profession and to enhance the business community’s knowledge of the essential role internal auditing plays in strong organizational governance, internal control, and effective risk management. According to the IIA, when management and the board of directors fully understand and appreciate the value of internal auditing, they ensure the internal audit activity is adequately sourced and effectively utilized.

The Toolkit is available from the IIA here.

More information is available from the IIA here.

FAF Names David A. Vaudt Chairman of the GASB

The Board of Trustees of the Financial Accounting Foundation (FAF) has named Iowa Auditor of State David A. Vaudt as the next chairman of the GASB, effective July 1, 2013. The FAF oversees the GASB and its sister organization, the FASB.

The FAF Trustees appointed Mr. Vaudt to a single, seven-year term, a change from the past practice of appointing GASB chairs to an initial five-year term with the possibility of serving a second five-year term. Mr. Vaudt will succeed current GASB Chairman Robert H. Attmore, who is retiring on June 30, 2013.

Mr. Vaudt has served as Iowa’s constitutionally elected auditor of state since January 2003. In that position, he has been responsible for auditing the state’s Comprehensive Annual Financial Report and Single Audit Report. He also has supervised the annual audit of more than 200 Iowa cities, counties, school districts, and other government organizations and agencies.

Previously, Mr. Vaudt worked for 25 years in KPMG’s Des Moines office, including 13 years as a partner. He specialized in the office’s government services practice and also served as the office’s human resources and recruiting partner. In the latter roles, he was responsible for conducting the annual reviews and evaluations of managers and staff and for leading the on-campus recruiting effort for audit professional staff. He also served as an instructor for KPMG national governmental accounting and auditing continuing education courses.

Mr. Vaudt was president of the National State Auditors Association from 2011 to 2012, chair of the National Association of State Boards of Accountancy from 2003 to 2004, and chair of the Iowa Accountancy Examining Board from 1995 to 2002. He also has served on the boards or audit committees of civic or government organizations, including the Better Business Bureau of Iowa, the Iowa Homeless Youth Centers, the Des Moines public school system, the Young Women’s Resource Center, and the Walnut Creek Family YMCA.

SEC Report Says Social Media OK for Company Announcements if Investors Are Alerted

The SEC has issued a “Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: Netflix, Inc., and Reed Hastings” (the Report) that makes clear that companies can use social media outlets, such as Facebook and Twitter, to announce key information in compliance with Regulation Fair Disclosure (Regulation FD). Investors must be alerted about which social media will be used to disseminate such information in order to comply with Regulation FD. In general, Regulation FD requires companies to distribute material information in a manner reasonably designed to get that information out to the general public broadly and non-exclusively.

The Division of Enforcement investigated whether the parties in the Report violated Regulation FD by announcing company metrics via a personal Facebook page that was not previously used to communicate with shareholders. The SEC staff decided not to pursue an enforcement action in this case. The Report confirms that Regulation FD applies to social media and other emerging means of communication used by public companies the same way it applies to company websites. The SEC issued guidance in 2008 clarifying that websites can serve as an effective means for disseminating information to investors if they’ve been made aware that’s where to look for it. The Report clarifies that company communications made through social media channels could constitute selective disclosures and, therefore, require careful Regulation FD analysis.

A copy of the Report is available on here.

A news release from the SEC is available here.

SEC Announces Agenda for Fixed Income Roundtable

The SEC has announced the agenda for its upcoming roundtable to discuss potential ways to improve the transparency and efficiency of fixed income markets. The roundtable, announced last month, will take place on April 16, 2013, in Washington D.C. Panelists will be announced at a later date.

The roundtable will be divided into four panels:

  • Current market structure for municipal securities;
  • Current market structure for corporate bonds and asset-backed securities;
  • Potential steps to improve the transparency, liquidity, or efficiency of the market structure for municipal securities; and
  • Potential steps to improve the transparency, liquidity, or efficiency of the market structure for corporate bonds and asset-backed securities.

A news release on this matter is available from the SEC 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 [email protected] if you have any questions related to these stories or ParenteBeard's services.

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