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December 8, 2022

Accounting News Roundup: Defending SOX and a Big Tax Position at the White House Remains Open | 05.04.17

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Ed. note: ANR will be off tomorrow, returning on Monday.

Defending SOX

Earlier this week, the Center for Audit Quality, Council of Institutional Investors, and CFA Institute went to bat for Sarbanes-Oxley, sending a letter to the House Financial Services Committee that the Financial CHOICE Act of 2017, a bill up for consideration, should leave the definition of “accelerated filer” alone:

One provision of the bill would grant certain low-revenue securities issuers an exemption from SOX Section 404(b), which requires auditors of public company financial statements to attest to, and report on, management’s assessment of its internal controls.

The bill proposes that issuers with market capitalizations of less than $500 million and depository institutions with assets of less than $1 billion should be exempt from SOX’s internal control evaluation requirement. Currently, pubic companies with market capitalizations of less than $75 million (known as non-accelerated filers) are exempt from SOX’s requirements for assessment of internal controls over financial reporting.

It’s hard to imagine that a public company with a market cap of $500 million would be held back by SOX 404 requirements, but, as they’ve demonstrated, Republican politicians will say and do just about anything, so I guess we shouldn’t be surprised by this.

How’s tax reform coming along?

Everyone had a good laugh last week when the Trump Administration turned in their homework for a tax reform assignment and it was evident that they hadn’t done the reading. Part of the problem might be that no one has been appointed to the assistant secretary for tax policy, a key position in past administrations, that has included a certain Big 4 CEO:

[George W.] Bush moved swiftly to fill the position. On March 1, 2001 — barely five weeks after his inauguration — the Senate confirmed his first assistant secretary of tax policy, Mark Weinberger. [Dean] Zerbe said there was “no question” that Weinberger’s leadership helped Bush succeed in cutting taxes during his first year in office.

Since M Dubs isn’t really available, maybe one of you would like to take on the thankless task of fixing our tax system while being undermined by your boss at every turn? For some of you, it can’t be any worse than your current situation.

Accountants behaving badly

David Humphrey, a veteran SEC accountant of 16 years, had enough free time at work that he could trade options. Except he’s not supposed to do that without getting permission first and some other stuff, too:

Humphrey was charged with one criminal count of making a false written statement, after repeatedly filing false government ethics forms that failed to disclose certain investments, according to a federal court filing.

Sources familiar with the case said he is expected to plead guilty to the criminal charge, and settle related civil SEC charges, after he was caught trading options – many on his SEC work computer – over more than a decade for himself, as well as for his mother and a friend.

He will also pay more than $100,000 in penalties and ill-gotten profits to settle the SEC’s civil case, and will be barred from practicing as an accountant before the SEC, the sources added.

I get that being a mid-level bureaucrat might not be the most glamorous life, but if the trading isn’t completely forbidden, why not get the permission and disclose the investments? It couldn’t have been that much of a hassle. I’m not much of an armchair psychologist, but I get a distinct sense of self-sabotage here.

Previously, on Going Concern…

Adrienne Gonzalez found a picture of AICPA CEO, President and log rolling champion, Barry Melancon after he got lei’d.

In other news:

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