AICPA Tells Congress to Keep Oversight of Investment Advisers with SEC

As the AICPA gears up for our 125th Anniversary next week, here’s a wrap up of a few interesting accounting topics recently making the news. You can follow @AICPANews on Twitter to stay on top of all the latest official AICPA news as well as articles impacting the profession.

CFO.com wrote that the AICPA raised concerns over the Investment Adviser Oversight Act of 2012 and urged Congress to keep oversight of investment advisers with the SEC. Introduced in the House of Representatives on April 25, the bill would transfer oversight of investment advisers from the SEC to a self-regulatory organization."Many of our members work for a firm that is registered as, or affiliated with, a registered investment adviser," Barry Melancon, CPA, CGMA, AICPA president and CEO, said in a statement. The AICPA's stance is that the system proposed under the bill would cost advisers much more in fees than current SEC oversight would.

On January 19, 2011, the SEC issued a staff report that found the current SEC-registered investment-adviser examination program faces hefty capacity and funding challenges. Three options were proposed to offset these challenges.  One would be to impose "user fees" on SEC-registered investment advisers to fund oversight. A second would authorize one or more SROs to examine investment advisers, with oversight from the SEC. A third choice would be to authorize the Financial Industry Regulatory Authority, a leading broker-dealer SRO, to examine dual registrants for compliance with the Investment Advisers Act of 1940. All three options require congressional action. "We believe that the SEC's core mission to protect investors requires adequate regulation of the investment advisory profession. The SEC remains the proper regulatory body to protect the public's best interest." Melancon said, "Providing the SEC with resources to properly enforce their rules is the best solution for investors and the public."

In the News: Accounting named one of the Happiest Jobs in America

We’ve got a lot of big things on the horizon at the AICPA: April Financial Literacy Month (we’ll be releasing survey results on the financial state of Americans) and in mid-May, we’ll be celebrating the 125^th Anniversary of the AICPA at our Spring Council meeting in Washington D.C.

Which is not to say that we’ve haven’t been busy lately! Just in the last week we released the results of our CGMA Global Economic Forecast and Barry Melancon, CPA, CGMA, president and CEO of the AICPA, testified before the House Capital Markets Subcommittee Accounting and Auditing Oversight Hearing. Melancon told members of the subcommittee that AICPA supports a strong, balanced and independent regulatory structure that protects investors but does not restrict the flow of capital.

During busy season and year-round, you can keep abreast of all the most important AICPA news by subscribing to the Media Relations RSS feed or following @AICPANews on Twitter. On to news of note from the last few days.

Proposed SOX 404(b) Changes Could Add to Investors’ Risks

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There has been quite a bit of legislative and regulatory activity over the past few months regarding Sarbanes-Oxley Section 404(b), which requires public companies to have an independent auditor attest to management’s assertions on internal controls over financial reporting. I want to bring you up to date on recent developments and the AICPA’s position on the issue.

Currently, an exemption exists for issuers with a public float of less than $75 million, a provision enacted as part of the 2010 Dodd-Frank Act. These smaller issuers were never required by the Securities and Exchange Commission to comply with Section 404(b) since enactment of SOX. However, legislative, regulatory, business and economic influences are combining to apply pressure to extend the exemption to larger public companies, believing it would reduce reporting burdens and spur job growth. The AICPA has consistently urged implementation of Section 404(b) for all publicly held companies. It has led to improved financial reporting and greater transparency, and the AICPA believes all investors in public companies should have equal benefit of the same protections.

What’s Hot These Days in AICPA Tax Advocacy?

While you are working late preparing tax returns, the AICPA is also keeping busy, evaluating proposed regulations and interpretations of current law that could affect your practice. What are some of the hot topics on our advocacy to-do list?  

Let’s start with information reporting.  Businesses that accept credit or debit cards are starting to receive the new Form 1099-K from their merchant card processing company that reports the gross amount they received during the prior year.  The form was created to ensure that businesses report their credit and debit card income, especially from online sales. (The IRS just posted more information on its website about the requirements.) 

Congress is Keen on XBRL

AICPA staff members are very busy keeping up with activity related to eXtensible Business Reporting Language in the U.S. Congress.  Earlier this month House Ways and Means Human Resources Subcommittee Chairman Geoff Davis (R-KY) and Ranking Member Lloyd Doggett (D-TX) introduced H.R. 3339, the Standard Data and Technology Advancement Act, or the “Standard DATA Act.” The bill aims to establish consistent requirements for the electronic content and format of data used in the administration of key human services programs. Specifically, it calls for the incorporation of existing nonproprietary standards, such as XBRL.

If enacted, this bill would improve the collection and dissemination process for the federal government by standardizing data and eliminating time-consuming and error-prone manual processes.