It’s difficult to know whether the regulatory penny has dropped in the United
States. While its regulators tell the rest of the world that they do not
regulate enough, business in the US last week made a strong case for a review of
the regulatory framework.
The US Chamber of Commerce has suggested that companies move away from
quarterly reporting to pure annual reporting. That would be a radical step, but
looks somewhat out of sync with what the firms are proposing in terms of
real-time reporting. Secondly, US Treasury secretary Henry Paulson, formerly of
Goldman Sachs, suggested the SEC should adopt ‘principles-based reporting’.
As far as the UK profession is concerned, many will feel the US has finally
understood what is working.
US Treasury secretary and former Goldman Sachs chairman Henry Paulson called
for s404 to be revised last year, and slated it again at the gathering of the
Chamber of Commerce last week.
This time, however, the politician went so far as to call for a complete
overhaul of the rules – clearly to the delight of the Chamber – urging the SEC
to adopt ‘principles-based’ rules for accounting. Former Federal Reserve
chairman Alan Greenspan whipped the regulator even more saying ‘… it worries me
that the regulatory system is by its very nature creating less flexibility’.
It’s clear that businesses and politicians are on the same page on this
topic. But we have yet to see how the US intends to change its rules
specifically. If s404 is so harsh, are US-listed companies set to drop the
paraphernalia of internal controls.
Recent moves by the International Federation of Accountants do not suggest
that US regulators think Sarbox is all that bad, in that the standard introduces
SEC chairman Christopher Cox, responded to criticism by saying: ‘We don’t
need to change the law.’
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned