By George M. Wilson & Carol A. Stacey
In recent weeks we have been posting about areas to deal with in advance of year-end. So far we have addressed:
Issues in the Statement of Cash Flows
The New Item 16 Form 10-K Summary
Recently Issued Accounting Standards and a Few Example Comments
SAB 74/Topic 11-M – News from the SEC at the September EITF Meeting
Should You Consider Any Issues for OCA Consultation?
A Year End Planning Detail – No More Mailing the ARS to the SEC!
Three Years of Fun – Planning the “Big Three” New FASB Statement Transitions
As we are getting ever closer to year-end this is also a good time to proactively review areas where financial reporting problems frequently occur and take steps to assure we have all the “i’s” dotted and “t’s” crossed in these areas.
Unusually complex accounting issues, difficult estimates and sensitive disclosures all become the focus of SEC comments. This is not because the Staff thinks they are important in and of themselves, but rather because these are areas where the Staff frequently uncovers problems in the comment process. Clearly if we do not deal with them appropriately, they involve risk of restatement and amendment.
There are a variety of ways you can keep up with the CorpFin Staff’s frequent comment areas. Every year at our Annual Reporting Forums in November and December, our Conference for Mid-Size and Smaller Companies in September and our Mid-Year Programs in May and June current and former Staffers discuss the areas where they have concerns.
Here is the list from our most recent programs:
- Segments
- Statement of Cash Flows
- Income Taxes
- Consolidation
- Business Combinations
- Fair Value
- Goodwill
- Revenue Recognition
- Non-GAAP Measures & Metrics
- Internal Control over Financial Reporting
Beyond hearing from the Staff and those in the know, many organizations research comment letters and summarize the areas and frequency of comments within these areas. You can find these summaries on the web pages for most of the national CPA firms. Here are links to some of them:
Deloitte’s SEC Comment Letter Series
PWC’s SEC Comment Letter Trends
Other companies build databases of comments which can be researched by comment area, CorpFin Office and even by reviewer. Two companies who sell these kinds of tools are Audit Analytics and Intelligize. However, remember the Staff’s caution that their comments are fact-specific to each registrant and you should never cut and paste from another letter.
If you have any other good sources of information about these issues, please leave them in a comment to this post, and, as usual, your thoughts and comments are welcome!