SEC 2018 Year In Review

In 2018, many of the Securities and Exchange Commission rules and activities that affect financial reporting continued to center on matters related to capital formation, cybersecurity, and the SEC staff’s Disclosure Effectiveness Initiative. Outside of the Commission’s rulemaking efforts and other emerging areas requiring the staff’s attention, the staff remained heavily focused on implementation and disclosure issues related to significant new accounting standards. These topics, among others, were recently emphasized and discussed at the annual AICPA Conference on Current SEC and PCAOB Developments held on December 10 - 12, 2018, where representatives of the SEC and PCAOB shared their views on various accounting, reporting, and auditing issues. More specifically, these rules and activities included:

• Interpretive guidance on cybersecurity to further emphasize the importance of cybersecurity policies, procedures, and disclosures.  In October, the Commission also released an investigative report about cyber-related frauds perpetrated against public companies and the related internal control requirements.

• Amendments that eliminate certain redundant and outdated disclosure requirements of Regulations S-X and S-K.

• Amendments to the definition of a smaller reporting company that increase the number of registrants eligible to apply scaled disclosures in their filings. 

• New rules that will require the use of “Inline XBRL” in financial statements, which are intended to improve the accuracy of tagged data and reduce costs over time.

• Proposed amendments to Rules 3-10 and 3-16 of Regulation S-X to streamline disclosures associated with registered debt securities.

• A Request for Comment on earnings releases and quarterly reports.   The Request followed a tweet from President Trump earlier in the year, who instructed the SEC to study the frequency of reporting in the U.S. 

                               
Our SEC Year in Review publication provides additional insight into these issues.  It also summarizes other Commission rulemaking, staff activities and practice issues from the conference that affect financial reporting.