This Financial Reporting Update highlights key developments and issues that are relevant to Finance and Accounting Professionals.


Securities and Exchange Commission

On February 14th, the Securities and Exchange Commission (SEC) proposed a revision to the Privacy Act Rule.

The Privacy Act is the principal law governing the handling of personal information in the federal government. The current rules provide procedures for making Privacy Act requests, including requests for access to and amendment of records pertaining to the individual making the request. The revisions will clarify, update, and streamline the language of several procedural provisions.

The Commission last updated its Privacy Act rules in 2011. These revisions would codify current practices for processing requests made by the public under the Privacy Act. This would provide more clarity regarding the Commission’s process for how individuals can access information pertaining to themselves. This rule would replace the Commission’s current Privacy Act regulations in their entirety.

The proposing release is published on and will be published in the Federal Register. The public comment period will remain open until Apr. 17, 2023, or until 30 days following publication of the proposing release in the Federal Register, whichever is later.

American Institute of Certified Public Accountants

On February 12th, the American Institute of Certified Public Accountants (AICPA) released its Cost of Business report.

The AICPA has set out proposals which could help tackle inflation. The AICPA inflation report includes research which found that the current inflation problem has multiple drivers including issues in labor markets and the supply side of the economy, which could be addressed through policy changes. An increase in productivity would also help mitigation efforts against inflation by allowing the supply side of the economy to grow and meet demand in a non-inflationary manner.

The report highlights how management accountants are supporting their businesses in dealing with the consequences and effects of high inflation, and how their skill sets are supporting effective mitigation strategies for their businesses. It also identifies several additional areas where action could be taken, including addressing labor shortages, increasing resilience in supply chains, and reducing tax burdens for businesses under pressure from rising prices.

Public Company Accounting Oversight Board

On February 2nd, the Public Company Accounting Oversight Board (PCAOB) released a new report to assist audit firms remedy quality control issues cited in inspections. The report reviews the PCAOB’s guidance from 2013 and provides additional considerations related to the remediation process:

  • Repeated or persistent criticisms require a new or enhanced response;
  • The importance of root-cause analysis;
  • How the PCAOB considers subsequent inspection results;
  • How the PCAOB evaluates the design of new or revised guidance, tools, or policies from firms;
  • What the PCAOB considers when evaluating the design of training programs;
  • PCAOB expectations on the timing of remediation design and implementation; and
  • The value of ongoing dialogue.

The Chess Consulting Accounting Advisory Practice works with public and privately held companies to support their complex accounting and financial reporting needs. Our experience includes SEC and financial reporting disclosures, purchase accounting, carve out accounting, equity-based compensation plans, debt restructuring, revenue recognition, and lease accounting to name a few. For more information, please contact us at (703) 796-2850.