Corporate Directors Wary of SEC Audit Proposals | Accounting Today News

It would be nice, in stories like this, to see what a survey of investors have to say as their responses might differ.

An overwhelming majority of corporate board directors oppose the Securities and Exchange Commission’s proposal to require mandatory disclosure of communications between audit committees and auditors, according to a new survey.

The survey, by BDO USA, found that when asked about the SEC concept release that would require disclosure of communications between the audit committee and the external auditor, an 87 percent majority of corporate directors believe such disclosures would have a negative impact on the audit committee—auditor relationship.

“Given proposals from shareholder activists for more transparency with regard to campaign contributions and a growing trend of companies self-reporting such information, board members appear to be getting more comfortable with the idea of mandatory disclosure of political contributions,” said Amy Rojik, a partner in the Corporate Governance Practice at BDO USA, in a statement. “In contrast, directors are clearly not in favor of mandated disclosure of audit committee communications with the external auditor. This is consistent with the comment letters the SEC has received on this proposal, as boards are sensitive to how such disclosures may have the unintended consequence of chilling communications between their audit committees and the external auditors.”
In addition, the BDO survey found 74 percent of public company board members do not believe the pending CEO–median employee pay ratio will be a meaningful disclosure for investors, while a similar percentage (72 percent) are in favor of the SEC’s proposed “claw back” rule requiring businesses to recoup senior executives incentive pay when material errors result in a financial restatement. A narrow majority of 53 percent of the 150 corporate board directors polled indicated they are in favor of the SEC developing mandatory disclosure rules for corporate political contributions.

via Corporate Directors Wary of SEC Audit Proposals | Accounting Today News.

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