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Auditors get notice to scrutinize SAB 74 disclosures

Tammy Whitehouse | June 29, 2017

Auditors have gotten the cattle prod from their profession to take a hard look at whether corporate disclosures about pending new accounting standards are adequate.

The Center for Audit Quality issued an alert to all public company auditors to remind them that the Securities and Exchange Commission is taking a dim view of vague or boilerplate disclosures under Staff Accounting Bulletin No. 74. That’s the SEC directive that tells companies they must alert investors about new accounting standards they will adopt in future periods and how the company’s balance sheet may change as a result.

“Auditors should focus on evaluating the adequacy of these SAB 74 disclosures and related controls,” the CAQ advises.

Companies have plenty of major new accounting standards they’ll be adopting over the next few years. New requirements for... To get the full story, subscribe now.