Best of 2009: Regulation

As regulators spent the year operating in flux, we kept tabs on their top corporate-finance concerns.

Best of 2009 Icon

The year 2009 was a traumatic one for financial regulators, no less than for the publicly traded companies and the accounting firms they oversee. Tarnished by revelations of excessive risk-taking (see the banking meltdown) and massive fraud (see Bernard Madoff), regulatory agencies faced the prospect of sweeping reform. In January President Obama chose Mary Schapiro as the new chairman of the Securities and Exchange Commission; she set about getting the agency’s house in order, naming Robert Khuzami as the SEC’s new director of enforcement. Meanwhile, lawmakers on Capitol Hill debated proposals for redesigning the entire U.S. financial-regulatory system. As the year came to a close, the Supreme Court was preparing to ponder the fate of the accounting firms’ overseer, the Public Company Accounting Oversight Board.

Amid the turmoil, we covered the issues that regulators were keenest on addressing, as well as the politics at the agencies and some surprising proposals (such as permanently exempting the smallest publicly traded companies from the auditor-attestation requirement of the Sarbanes-Oxley Act). The selection of stories below reflects the top regulatory issues that faced corporate finance chiefs in 2009.

Mixed Signals: A New Reason to Revisit Materiality

A report says most restatements made on the sly have only a minor negative effect on net income. So, were the fixes even necessary, especially in light of complaints that investors are suffering from information overload?

Simplified Reporting: Forgotten in the Crisis? 

It’s been a year since an SEC advisory committee made suggestions for improving the standard-setting and preparation that goes into financial statements.

Regulators Eye “Going Concern” Concerns

With the economic crisis deepening, auditors and their clients get testy with each other about companies’ ability to survive.

Mary Schapiro Vows to Be Tough Enforcer

At Senate hearings on her nomination as SEC chief, she says she’d immediately attack problems in the U.S. regulatory system and “reinvigorate” the enforcement staff. She may also slow down the IFRS roadmap.

The SEC’s Most Wanted

What does the regulator most want to see in future financial filings? Recent comment letters suggest that the Securities and Exchange Commission has a keen interest in goodwill impairments, fair-value measurements, and credit-risk disclosures.

Dear CFO: Watch Your Loan Loss Reserves

The SEC issues a new letter aimed at financial institution CFOs, emphasizing the need to “reassess” loan loss reserves in light of the economic slump.

No More Lenience on Pay Disclosure: SEC

The regulator pledges to finally get tough on the enforcement of its three-year-old compensation-disclosure rules.

CFOs High-five on 404 Rollback Bill

But some accounting experts despair over a resulting lack of checks on management’s assessment of internal controls of financial reporting.

PCAOB to Auditors: Focus on the CFO

A new guidance by the audit oversight board shows how finance chiefs can either buttress or make a hash out of a small company’s internal controls.

Its Future in Limbo, the PCAOB Asks for More Money

As the Supreme Court prepares to consider the Public Company Accounting Oversight Board’s fate, the board seeks a budget increase.


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