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Making Outreach a Priority

Maria L. Murphy, CPA

I recently attended the Thirteenth Annual Financial Reporting Conference at Baruch College in New York City. My attention was drawn to a recurring theme in many of the speakers’ presentations—outreach—because it is an unusual message to hear at a conference with an agenda full of presentations by regulators and standards setters.

Webster's Dictionary includes the obvious definition of outreach as the “act of reaching out,” and also as “the extent or limit of reach” and “the extending of services or assistance beyond current or usual limits.” It is this last definition that seems to be most relevant to current activities at the SEC, PCAOB, and FASB.

Thoughts from Regulators and Standards Setters

At the conference, SEC speakers discussed their project on disclosure effectiveness. They are currently rethinking the existing requirements in their regulations in order to ensure that material information is provided to users while reducing the cost and burden on companies that provide it. They indicated that this project requires a team effort to succeed, including public outreach. They have added a spotlight page on the SEC website to allow companies, investors, and others to share their views on disclosure effectiveness with the SEC.

Let's consider areas for outreach within our own organizations.

The SEC speakers also mentioned FASB's current outreach to investors as part of the standards-setting process and agenda decision making. The project to simplify accounting and reporting standards is, in large part, a response to investors telling FASB that accounting standards are too complex and financial statements are too difficult to understand.

FASB speakers relayed details of their outreach to regulators. They meet quarterly with the PCAOB in order to be in sync on standards-setting and auditing issues. They have an ongoing, historical relationship with the SEC. Their relationship with the IASB is now collaborative, including regular discussions and the sharing of information and advice. A recent example of this collaboration is the new converged revenue recognition standard. FASB's current agenda includes the formation of a “transition resource group,” with representatives that include preparers, auditors, investors, and IASB members. This group will interpret standards, discuss implementation issues in advance, and educate the public and FASB on reducing complexity.

PCAOB speakers discussed their intention to identify audit quality indicators (AQI) that would assist audit committees in their responsibility to evaluate the quality of auditors and audits. They also talked about the recent improvements that had resulted from inspection findings provided to large firms on quality control. Internal control over financial reporting was noted to have improved since the passage of the Sarbanes-Oxley Act as a result of an iterative and ongoing process of communication and education.

The Center for Audit Quality (CAQ) has been focused for years on audit committee outreach and education, including the recent development of its own AQIs. (For more details, see Susan Brooke's article on p. 8 of this issue.)

The Profession's Response

My reaction to all of this is that we, as a profession, need to respond to outreach requests and opportunities by providing input and making recommendations based upon our experience and our interactions with clients, auditors, legal counsel, and fellow accountants in industry. We have valuable insight into what works in the areas of accounting, financial reporting, and auditing—and we know best what the pain points are in this process. For more about what the speakers presented at the Baruch conference, read the Journal's coverage in the July issue.

This issue of The CPA Journal focuses on corporate finance and management accounting, so let's also consider areas for outreach within our own organizations in order to improve our dialogue with each other. As always, I welcome your outreach to us with feedback on The CPA Journal and areas of interest to you so that we can best meet your needs.

Maria L. Murphy, CPA. Editor-in-Chief.

The opinions expressed here are my own and do not reflect those of the NYSSCPA, its management, or its staff.

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