Last week, the Securities and Exchange Commission unveiled its latest strategic plan, which identifies the Commission's goals for the next five years.
The 58-page plan, which was approved July 9, includes plans to upgrade its technology, recruit more proactively, and improve internal communication.
The SEC is required to produce a five-year plan every three years.
Nicolaisen
One goal listed in the plan, to “work closely with the PCAOB on regulation of the accounting profession and the promulgation and interpretation of auditing standards,” is in line with recent comments by SEC Chief Accountant Donald Nicolaisen.
At a PCAOB roundtable last month, Nicolaisen said that as the PCAOB engages more staff with expertise in auditor independence issues, he expects “a great number of the independence interpretive issues that currently are handled in my office appropriately will migrate to the PCAOB.”
Another priority for the Commission: To align financial reporting standards worldwide. According to the report, “The agency supports ongoing convergence initiatives between the Financial Accounting Standards Board and the International Accounting Standards Board to enhance the quality of financial reporting worldwide.”
The first challenge to that philosophy may be the FASB's proposal to expense stock options, which is being challenged by a bill recently passed in the U.S. House of Representatives.
Proxy Access, MD&A, And More
Regarding corporate governance initiatives, the plan states that the Commission will complete a variety of rulemaking activities, including enhancing shareholder access to the proxy process, and "bolstering
the disclosure requirements related
to shareholder proxy access."
The plan also calls for expanding interpretive guidance
regarding critical disclosure requirements
such as management’s discussion
and analysis of financial condition
and results of operations.
The Commission will also complete a report on the use of, and financial reporting for, off-balance sheet transactions and the special purpose entities used to facilitate such transactions.
The SEC plan also notes that the Commission's basic organizational structure may change.
Currently, the SEC is organized into six major program areas:
Full Disclosure;
Prevention & Suppression of Fraud;
Supervision & Regulation of Securities Markets;
Investment Management Regulation;
Legal & Economic Services; and
Program Direction.
According to the report, the SEC is considering a number of changes to that organizational structure, noting that “one possibility under consideration would be to better align these structures with the customers the agency serves.”
The plan also emphasizes leveraging other resources, including federal, state an foreign governments, agencies and organizations. It also mentions an enhanced use of technology, and expanded risk-based assessment practices. To those ends the Commission recently formed an Office of Risk Assessment, led by Fidelity Investments veteran Charles A. Fishkin.
The SEC said it will seek public comment on its new plan for the next 90 days. A complete version of the SEC strategic plan can be downloaded from the box above, right.
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