This Financial Reporting Update highlights key developments and issues that are relevant to finance and accounting personnel.
Financial Accounting Standards Board
The Financial Accounting Foundation (FAF) Board of Trustees recently appointed nine new members to the Financial Accounting Standards Advisory Council (FASAC). The remaining 26 members were reappointed for an additional one-year term by the FAF Trustees. The nine new members started their one-year terms on January 1, 2022 and now have the ability to be reappointed. A full list of all current members of the FASAC can be found here.
Securities and Exchange Commission
The Securities and Exchange Commission (SEC) granted two whistleblower awards totaling $4 million for providing information regarding separate cases. The first award given totaled $2.6 million due to new information of misconduct outside of the United States. The second award was granted to joint whistleblowers who provided information throughout the entirety of the case. This award totaled $1.5 million.
The SEC is currently looking to appoint new candidates for the Investor Advisory Committee. The SEC cites the committee as being “established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to advise the Commission, protect investor interests and promote the integrity of the securities marketplace.” A full background of the Investor Advisory Committee and the process to nominate candidates can be found here.
The SEC has formally charged Crowd Machine and Metavine founder Craig Sproule with defrauding investors. The SEC said these charges are for “making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities.” Sproule raised $40.7 million through an initial coin offering (ICO) of Crowd Machine Compute Tokens (CMCTs). Sproule promised investors the development of new software for Metavine. However, it was not disclosed to investors that 5.3 million of the ICO offering went to South African gold mining entities. The SEC also claims that Sproule did not officially register the offers and sales of CMCTs with them and “sold CMCTs to “ICO pools”—groups of investors, including individuals in the U.S.—without determining whether the underlying investors were accredited.” Sproule has not confirmed or denied the validity of the charges but has contested to judgments which rely on court approval.
American Institute of Certified Public Accountants
The American Institute of CPAs (AICPA) is joining a group of eleven other stakeholders to form a coalition seeking the Internal Revenue Service (IRS) to “meaningfully reduce unnecessary burdens for taxpayers and practitioners during this upcoming tax filing season.” This coalition is in part responding to a statement from the Department of the Treasury. They acknowledged that there will be challenges for the upcoming tax filing season but offered no solutions to lessen said challenge. The AICPA specifically is advocating for penalty relief for taxpayers due to the pandemic.
Public Company Accounting Oversight Board
As of January 10th, a new chair of The Public Company Accounting Oversight Board (PCAOB) was sworn into position. Erica Y. Williams was appointed on November 8th, 2021, by the SEC and will serve in the role until October 24th, 2024. Before becoming chair Williams served at the SEC as the Deputy Chief of Staff for three sperate chairs. From there she was a litigation partner with Kirkland & Ellis LLP before taking on her current position. More information on the PCAOB can be found here.