June 23, 2020
By: Sagar Teotia, Chief Accountant
On April 3, 2020, the Office of the Chief Accountant (OCA) issued a statement regarding the importance of high-quality financial reporting in light of the significant impacts of COVID-19. At that time, in addition to facing a number of operational and other challenges, many public companies were in the midst of their first quarter financial reporting process, working through accounting and financial reporting issues related to the impact of, and uncertainties related to, COVID-19. In this time of unprecedented uncertainty, because of the diligent efforts of so many, our financial reporting system has continued to serve its critical function of providing much-needed information to investors and our capital markets. We recognize and appreciate the efforts of various participants in our financial reporting system (e.g., preparers, auditors, audit committee members) to provide high-quality information to investors.
As many public companies now prepare for their next reporting cycle (e.g., second quarter financial reporting), we emphasize that the participants in the financial reporting system continue to play an important role in the functioning of our markets and in our collective national effort to mitigate the COVID-19 pandemic. We look forward to our financial reporting system continuing to provide a steady flow of timely, decision-useful information to investors and our public capital markets.
In OCA, we have long recognized that our active coordination and engagement with public companies, auditors, audit committees, other regulators, standard setters, investors and others (both domestically and internationally), is fundamental to our efforts to promote high-quality financial reporting and support the SEC’s fulfillment of its three-part mission to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation.
We highlight below our recent engagement with stakeholders throughout the financial reporting system, including some of the significant accounting, auditing and financial reporting issues recently addressed by OCA. Specifically, in this statement we cover the following topics:
I. OCA’s Engagement and Work Related to High-Quality Financial Reporting;
II. Engagement with the FASB and the PCAOB;
III. Engagement with International Standard Setters and Other Regulators; and
IV. Engagement with and the Vital Role of Audit Committees.