SEC picks on companies ahead of audit conference

The SEC has queried the
accounts of dozens of UK companies with US listings, according to advisers.

The claim comes as senior members of the audit profession prepared to gather
next week for a conference which will discuss the subject.

Big Four advisers confirmed the extent and nature of the letters, which have
been received by companies in the past month.

& Young
’s global
director, David Lindsell, said: ‘They are picking up on a lot of
detail. IFRS is, in many ways, far less rules-based than US GAAP… but the SEC is
asking a lot of questions. In some cases, the issues are overlooked and in
others they are irrelevant… minor petty stuff that gets up people’s noses,’ he

Advisers from E&Y, Deloitte and PricewaterhouseCoopers indicated that the
number of letters probably ran into the dozens.

‘In the past, companies got letters from the SEC every few years. Now they’re
all getting them in response to their filing.

‘I think they are trying to resist appearing to be absolutely nasty. They are
not, for example, asking for companies to re-file their statements,’ said

He warned that a regulator like the
SEC could either help
companies or ‘make a nuisance of themselves’.

Ken Wild,
national director of assurance, said that he did not see the challenging
questions from the regulator that he expected. ‘The letters are fairly detailed.
But that is the SEC.

‘The worrying thing, clearly, is that IFRS is principles-based, so asking for
this level of detail is inconsistent with IFRS.

‘I would like to see IFRS handled at a higher level,’ said Wild.

PwC’s partner in
global capital markets Tom Quinn, said: ‘The volume of comments relating to IFRS
is significantly in excess of what we’ve seen in the past relating to local

With IFRS, US GAAP and the SEC’s comment letters on the agenda, members of
the profession are to discuss the SEC’s approach next week at the eighth annual
Meet the experts conference organised by PricewaterhouseCoopers.

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