We are pleased to release MaloneBailey's December 2020 issue of The Crunch, our newsletter highlighting recent accounting, regulatory and tax updates. Please note that the updates provided in this newsletter are not a comprehensive list. We encourage you to visit the SEC, FASB and IRS websites for more information as well as a complete list of updated rules, regulations and proposals.  We invite you to contact us should you have any questions about the information provided in this issue.  Please visit our website to review archived versions of this newsletter containing past accounting, regulatory and tax updates. The MaloneBailey Team www.malonebailey.com

What's the Crunch?  Featured Podcast FASB Improves Convertible Instruments and Contracts in an Entity's Own Equity COVID-19 Related Updates FASB Accounting Standards Updates - Accounting Standards Update No. 2020-11 —Financial Services —Insurance (Topic 944): Effective Date and Early Application  Recent Accounting & Regulatory Updates Recent FASB & AICPA Updates FASB Accounting Standards Updates - Accounting Standards Update No. 2020-10 —Codification Improvements  FASB Accounting Standards Updates - Accounting Standards Update No. 2020-09 —Debt (Topic 470) —Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762  FASB Accounting Standards Updates - Accounting Standards Update No. 2020-08 —Codification Improvements to Subtopic 310-20, Receivables —Nonrefundable Fees and Other Costs Exposure Draft - Proposed Accounting Standards Update 2020-800 —Earnings Per Share (Topic 260), Debt —Modifications and Extinguishments (Subtopic 470-50), Compensation —Stock Compensation (Topic 718), and Derivatives and Hedging —Contracts in Entity's Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Forwards and Options (a consensus of the Emerging Issues Task Force)   Exposure Draft - Proposed Accounting Standards Update 2020-900 —Reference Rate Reform (Topic 848): Scope Refinement  Exposure Draft - Proposed Accounting Standards Update 2020-700 —Leases (Topic 842): Targeted Improvements  FASB Agenda – FASB Discusses FASB Agenda   Depository and Lending Institutions – New Edition of AICPA Audit and Accounting Guide Published  Investment Companies – New Edition of AICPA Audit and Accounting Guide Published  Use of Specialists – AICPA’s ASB Proposes New SAS on the Use of Specialists and Pricing Information Obtained from External Information Sources  Recent SEC & PCAOB Updates Release No: 34-90246: Portfolio Margining of Uncleared Swaps and Non-Cleared Security-Based Swaps   Release No. 33-10884: Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets  Release No. 34-90244: Customer Margin Rules Relating to Security Futures  Release No. 33-10876: Qualifications of Accountants  SEC Staff Speech, When the Nail Fails – Remarks before the National Society of Compliance Professionals by Commissioner Hester M. Peirce  SEC Staff Speech, Volume, Value, and Impact: Remarks by the SEC Ombudsman Tracey L. McNeil  SEC Staff Speech, Remarks At SEC Speaks 2020 by Commissioner Elad L. Roisman  SEC Staff Speech, An Update on FY 2020 Results - Remarks at SEC Speaks by Chairman Jay Clayton  SEC Staff Speech, The Car Talk of Capital Raising by Martha Miller, Advocate for Small Business Capital Formation  SEC Staff Speech, Investing in the Public Option: Promoting Growth in Our Public Markets Remarks at The SEC Speaks in 2020 by Commissioner Allison Herren Lee  Critical Audit Matters – PCAOB Publishes Interim Analysis Report on Initial Impact of Critical Audit Matter Requirements  Tax Updates The IRS Commences New Electronic Processing and Signature Options for IRS Professionals and Taxpayers Extra Crunch NYSE's Work This Way: Interviews with Business Leaders from the Comfort of their Homes About MaloneBailey, LLP

Featured Podcast

FASB Improves Convertible Instruments and Contracts in an Entity's Own Equity Summary - In this episode of “Everybody Counts”, Caroline Rosen, Marketing and Communications Manager and Yuki Hua, Audit Manager discuss FASB's improvements to convertible instruments and contracts in an entity's own equity including details about the update, what it will change and who it will affect. For this podcast and many more, please visit the Resources section of the MaloneBailey website.

COVID-19 Related Updates

FASB Accounting Standards Updates - Accounting Standards Update No. 2020-11 —Financial Services —Insurance (Topic 944): Effective Date and Early Application Summary - The FASB issued Accounting Standards Update (ASU) that will help insurance companies adversely affected by the COVID-19 pandemic by giving them an additional year to implement ASU No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI). For insurers that do not need the extra time, the ASU makes it easier and more cost-effective to maintain their current timelines and early adopt LDTI. The new ASU has two purposes: To ensure a high-quality implementation of LDTI guidance by permitting insurance companies impacted by the pandemic to take an additional year to apply the standard; and To reduce cost and complexity for insurance companies that remain on track to make a successful transition to the standard by the current effective date. To facilitate early application and encourage accelerated delivery of better information to investors, the ASU allows insurance companies to restate only one previous period, rather than two, if they choose to early adopt LDTI.  For insurance companies that need extra time, the ASU permits them to delay implementation by one year as follows: For SEC filers, excluding smaller reporting companies as defined by the SEC, LDTI is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. For all other entities, LDTI is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025 For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Recent FASB & AICPA Updates

FASB Accounting Standards Updates - Accounting Standards Update No. 2020-10 —Codification Improvements Summary - The FASB issued Accounting Standards Update (ASU) No. 2020-10, Codification Improvements. The amendments in this ASU affect a wide variety of Topics in the Codification. They apply to all reporting entities within the scope of the affected accounting guidance. More specifically, this ASU, among other things, contains amendments that improve the consistency of the Codification by including all disclosure guidance in the appropriate Disclosure Section (Section 50). Many of the amendments arose because the FASB provided an option to give certain information either on the face of the financial statements or in the notes to financial statements and that option only was included in the Other Presentation Matters Section (Section 45) of the Codification. The option to disclose information in the notes to financial statements should have been codified in the Disclosure Section as well as the Other Presentation Matters Section (or other Section of the Codification in which the option to disclose in the notes to financial statements appears). Those amendments are not expected to change current practice. For more information, click here.  © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

FASB Accounting Standards Updates - Accounting Standards Update No. 2020-09 —Debt (Topic 470) —Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 Summary - The FASB has issued Accounting Standards Update (ASU) No. 2020-09, Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762. This ASU amends and supersedes various SEC paragraphs to reflect SEC Release No. 33-10762, which includes amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees. These SEC changes are intended to both improve the quality of disclosure and increase the likelihood that issuers will conduct debt offerings on a registered basis.  The amended rules adopted by the SEC focus on “the provision of material, relevant, and decision-useful information regarding guarantees and other credit enhancements, and eliminate prescriptive requirements that have imposed unnecessary burdens and incentivized issuers of securities with guarantees and other credit enhancements to offer and sell those securities on an unregistered basis. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

FASB Accounting Standards Updates - Accounting Standards Update No. 2020-08 —Codification Improvements to Subtopic 310-20, Receivables —Nonrefundable Fees and Other Costs Summary - The FASB issued Accounting Standard Update (ASU) No. 2020-08, Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs. This ASU clarifies that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. It is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is not permitted. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application is permitted for all other entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. All entities should apply the amendments in ASU 2020-08 on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Exposure Draft - Proposed Accounting Standards Update 2020-800 —Earnings Per Share (Topic 260), Debt —Modifications and Extinguishments (Subtopic 470-50), Compensation —Stock Compensation (Topic 718), and Derivatives and Hedging —Contracts in Entity's Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Forwards and Options (a consensus of the Emerging Issues Task Force) Summary - The FASB issued a proposed Accounting Standards Update (ASU) that would clarify an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified forwards and options (e.g., warrants) that remain equity classified after modification. Stakeholders are asked to review and provide input on the proposed ASU by December 28, 2020.  The proposed ASU is based on a consensus of the FASB’s Emerging Issues Task Force (EITF). The proposed ASU would provide guidance on how an issuer would measure and recognize the effect of these transactions. Specifically, it would provide a principles-based framework to determine whether an issuer would recognize the modification or exchange as an adjustment to equity or an expense. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Exposure Draft - Proposed Accounting Standards Update 2020-900 —Reference Rate Reform (Topic 848): Scope Refinement Summary - The FASB issued for public comment a proposed Accounting Standards Update (ASU) that would clarify the scope of the FASB’s recent reference rate reform guidance. Stakeholders are asked to review and provide input on the proposed ASU by November 13, 2020. Trillions of dollars in loans, derivatives, and other financial contracts reference the London Interbank Offered Rate (LIBOR), the benchmark interest rate banks use to make short-term loans to each other. With global capital markets expected to move away from LIBOR, the FASB took on a project to help ease the potential accounting burden. As a result of that project, in March 2020 the FASB issued ASU No. 2020-04—Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. Topic 848 provides temporary, optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. Since then, stakeholders have raised questions about whether Topic 848 can be applied to derivative instruments that do not reference a rate that is expected to be discontinued but that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Stakeholders indicated that the modification, commonly referred to as the “discounting transition,” may have accounting implications. These stakeholders raised concerns about the need to reassess previous accounting determinations related to those contracts and about the hedge accounting consequences of the discounting transition.  The amendments in this proposed ASU would clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to contracts that are affected by the discounting transition. Amendments in this proposed ASU to the expedients and exceptions in Topic 848 are included to capture the incremental consequences of the proposed scope refinement and to tailor the existing guidance to derivative instruments affected by the discounting transition. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Exposure Draft - Proposed Accounting Standards Update 2020-700 —Leases (Topic 842): Targeted Improvements Summary - The FASB issued a proposed ASU intended to improve three areas of the leases guidance. Stakeholders are encouraged to review and provide comments on the proposed changes by December 4, 2020.  The amendments in the proposed ASU address the following areas: For lessors, it would amend lease classification requirements for leases in which the lease payments are predominantly variable by requiring lessors to classify and account for those leases as operating leases. In doing so, the risk of lessors recognizing losses at lease commencement for sales-type leases that are expected to be profitable would be mitigated and the resulting financial reporting is expected to more faithfully represent the economics underlying the lease. For lessees, it would provide the option to remeasure lease liabilities for changes in a reference index or a rate affecting future lease payments at the date that those changes take effect; that option would be available as an entity-wide accounting policy election. Finally, for both lessees and lessors, it would change the requirements when there is an early termination of some leases within a contract that does not economically affect the remaining leases in that contract. In those circumstances, entities would be exempt from applying modification accounting to the remaining leases. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

FASB Agenda – FASB Discusses FASB Agenda Summary - As reported in its “Summary of Board Decisions” publication, the FASB met on October 21, 2020, and discussed the results of staff research and outreach on five potential projects related to recent agenda requests. The FASB decided to add the following projects to its technical agenda: Disclosure of supplier finance programs involving trade payables Consolidation of a not-for-profit entity by a for-profit sponsor. The FASB decided not to add the following potential projects to its agenda: Digital currencies Change to diluted earnings per share reporting Determining a lessee’s discount rate: when use of the rate implicit in a lease is required. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Depository and Lending Institutions – New Edition of AICPA Audit and Accounting Guide Published Summary - The AICPA has published a new edition of its Audit and Accounting Guide, Depository and Lending Institutions: Banks and Savings Institutions, Credit Unions, Finance Companies, and Mortgage Companies. This guide has been developed by the AICPA Guides Combination Task Force to assist practitioners in performing and reporting on their audit or their attestation engagements, and to assist management in the preparation of their financial statements in conforming with U.S. generally accepted accounting principles (GAAP). This new edition of the guide has been modified by the AICPA staff to include certain changes necessary due to the issuance of authoritative guidance since the guide was originally issued, and other revisions as deemed appropriate. Relevant guidance issued through July 1, 2019, has been considered in the development of this edition of the guide. However, this guide does not include all audit, accounting, reporting, and other requirements applicable to an entity or a particular engagement.  Relevant guidance that is issued and effective on or before July 1, 2019, is incorporated directly in the text of this guide. Relevant guidance issued but not yet effective as of July 1, 2019, but becoming effective on or before December 31, 2019, is also presented directly in the text of the guide, but shaded gray and accompanied by a footnote indicating the effective date of the new guidance.  For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Investment Companies – New Edition of AICPA Audit and Accounting Guide Published Summary - The AICPA has published a new edition of its Audit and Accounting Guide, Investment Companies. This guide has been developed by the AICPA Guides Combination Task Force to assist practitioners in performing and reporting on their audit or their attestation engagements, and to assist management in the preparation of their financial statements in conforming with U.S. GAAP. This new edition of the guide has been modified by the AICPA staff to include certain changes necessary due to the issuance of authoritative guidance since the guide was originally issued, and other revisions as deemed appropriate. Relevant guidance issued through July 1, 2020, has been considered in the development of this edition of the guide. However, this guide does not include all audit, accounting, reporting, and other requirements applicable to an entity or a particular engagement. Relevant guidance that is issued and effective on or before July 1, 2020, is incorporated directly in the text of this guide. Relevant guidance issued but not yet effective as of July 1, 2020, but becoming effective on or before December 31, 2020, is also presented directly in the text of the guide, but shaded gray and accompanied by a footnote indicating the effective date of the new guidance.  For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Use of Specialists – AICPA’s ASB Proposes New SAS on the Use of Specialists and Pricing Information Obtained from External Information Sources Summary - The AICPA’s Auditing Standards Board (ASB) issued the exposure draft, Proposed Statement on Auditing Standards, Amendments to AU-C Sections 501, 540, and 620 Related to the Use of Specialists and the Use of Pricing Information Obtained From External Information Sources (Exposure Draft). The comment deadline is February 4, 2021. The proposed Statement on Auditing Standard (SAS), if adopted as proposed, would amend: SAS 122, Statements on Auditing Standards: Clarification and Recodification, as amended, sections 501, Audit Evidence — Specific Considerations for Selected Items, and 620, Using the Work of an Auditor’s Specialist; and SAS 143, Auditing Accounting Estimates and Related Disclosures. The ASB has issued the Exposure Draft in response to comment letters received on the exposure draft of SAS 143 requesting additional guidance relating to PCAOB Auditing Standard (AS) 2501, Auditing Accounting Estimates, Including Fair Value Measurements. As noted in the Explanatory Memorandum to the Exposure Draft, the proposed amendments would: Provide guidance on application of SAS 143 “when management has used the work of a specialist in making accounting estimates as well as other proposed amendments to enhance guidance about evaluating the work of the management’s specialist;” Provide that using the work of an external inventory-taking firm would not include using the work of a management’s specialist; Add a new appendix to AU-C Section 500, Audit Evidence, to provide guidance on the use of pricing information obtained from external information sources to be used as audit evidence for estimates related to the fair value of financial instruments; and Amend AU-C Section 620 to enhance guidance on using the work of an auditor’s specialist. If adopted as proposed, the amendments to AU-C Sections 501, 540, and 620 will be effective for audits of financial statements for periods ending on or after December 15, 2023. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Recent SEC & PCAOB Updates

Release No. 33-10884: Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets Summary - The SEC amended its rules in order to “harmonize, simplify, and improve the multilayer and overly complex exempt offering framework. These amendments will promote capital formation and expand investment opportunities while preserving or improving important investor protections.” The SEC indicates that a core component of the Federal regulatory regime is the requirement that all securities offerings be registered with the SEC or qualify for an exemption from registration. The registration process generally is designed for larger companies with substantial resources. As a result, many entrepreneurs and emerging businesses raise capital by selling securities in reliance on an offering exemption. This important capital formation activity ranges from raising seed capital for new businesses to growth capital for companies of all sizes, including those on the path to a registered initial public offering. The SEC’s amendments are the next step in the agency’s efforts to improve the exempt offering framework for the benefit of investors, emerging companies, and more seasoned issuers. The amendments follow the SEC’s June 2019 concept release and March 2020 proposing release on the harmonization of offering exemptions and benefit from extensive public engagement. The amendments address gaps and complexities in the exempt offering framework that impede access to capital for issuers and access to investment opportunities for investors. The amendments generally: Establish more clearly, in one broadly applicable rule, the ability of issuers to move from one exemption to another; Increase the offering limits for Regulation A, Regulation Crowdfunding, and Rule 504 offerings, and revise certain individual investment limits; Set clear and consistent rules governing certain offering communications, including permitting certain “test-the-waters” and “demo day” activities; and Harmonize certain disclosure and eligibility requirements and bad actor disqualification provisions. The amendments will be effective 60 days after publication in the Federal Register, except for the extension of the temporary Regulation Crowdfunding provisions, which will be effective upon publication in the Federal Register. For more information, click here.  © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Release No. 34-90244: Customer Margin Rules Relating to Security Futures Summary - The SEC and the Commodity Futures Trading Commission (the Commissions) approved a joint final rule that will “harmonize the minimum margin level for security futures, whether they are held in a futures account, a securities portfolio margin account, or a securities account that is not approved for portfolio margining.” The Commissions have joint rulemaking authority regarding margin requirements for security futures. In 2002, the Commissions adopted rules establishing margin levels for unhedged security futures at 20 percent. In light of the asymmetry in margin requirements resulting from the 15 percent margin level that has been established for security futures and comparable financial products held in a securities portfolio margin account, the Commissions are adopting the proposed margin requirement to set the required margin level for each long or short unhedged position in a security future at 15 percent of its current market value. At this time, there are no security futures contracts listed for trading on U.S. exchanges. The final rule amendments, however, would set a 15 percent level for security futures if an existing exchange were to resume operations or another exchange were to launch security futures contracts. This final rule is effective 30 days after publication in the Federal Register. For more information, click here.  © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Release No. 33-10876: Qualifications of Accountants Summary - The SEC announced that it has adopted final amendments to certain auditor independence requirements in Rule 2-01 of Regulation S-X. The SEC indicates that informed “by decades of staff experience applying the auditor independence framework, the final amendments modernize the rules and more effectively focus the analysis on relationships and services that may pose threats to an auditor’s objectivity and impartiality.” The final amendments reflect updates based on recurring fact patterns that the SEC staff has observed over years of consultations in which certain relationships and services triggered technical independence rule violations without necessarily impairing an auditor’s objectivity and impartiality. The SEC indicates that these relationships either triggered non-substantive rule breaches or required potentially time-consuming audit committee review of non-substantive matters, thereby diverting time, attention, and other resources of audit clients, auditors, and audit committees from other investor protection efforts. The final amendments result in auditor independence requirements that will be used to evaluate specific relationships and services, with a focus on protecting investors against threats to the objectivity and impartiality of auditors. Among other things, the final amendments: Amend the definitions of “affiliate of the audit client,” in Rule 2-01(f)(4), and “investment company complex,” in Rule 2-01(f)(14), to address certain affiliate relationships, including entities under common control; Amend the definition of “audit and professional engagement period,” specifically Rule 2-01(f)(5)(iii), to shorten the look-back period, for domestic first time filers in assessing compliance with the independence requirements; Amend Rule 2-01(c)(1)(ii)(A)(1) and (E) to add certain student loans and de minimis consumer loans to the categorical exclusions from independence-impairing lending relationships; Amend Rule 2-01(c)(3) to replace the reference to “substantial stockholders” in the business relationships rule with the concept of beneficial owners with significant influence; Replace the outdated transition provision in Rule 2-01(e) with a new Rule 2-01(e) to introduce a transition framework to address inadvertent independence violations that only arise as a result of a merger or acquisition transactions; and Make certain other miscellaneous updates. The amendments will be effective 180 days after publication in the Federal Register. Voluntary early compliance is permitted after the amendments are published in the Federal Register in advance of the effective date provided that the final amendments are applied in their entirety from the date of early compliance. Auditors are not permitted to retroactively apply the final amendments to relationships and services in existence prior to the effective date or the early compliance date if selected by an audit firm. For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, When the Nail Fails – Remarks before the National Society of Compliance Professionals by Commissioner Hester M. Peirce Summary - SEC Commissioner Hester M. Peirce recently discussed her thoughts on the increasing personal liability for compliance officers and the risk that this could cause talented individuals to forgo a career in compliance, among other negative effects. Peirce indicated that compliance officers’ “responsibilities are growing, but the nature of the liability they face in executing those responsibilities remains unclear. Indeed, this past February, the New York City Bar published a report that distilled many of the concerns, and offered a number of recommendations.” For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, Volume, Value, and Impact: Remarks by the SEC Ombudsman Tracey L. McNeil Summary - SEC Ombudsman Tracey L. McNeil recently discussed the SEC’s Office of the Investor Advocate which appointed her. McNeil highlighted her efforts indicating that she recognizes “the importance of the quality of service we provide. I have no real control over the volume or substance of matters that come in, and I never wanted to equate the volume of matters received to the value of the role. Assisting just one investor with one issue can make a significant difference to that investor, to their family, and at times, to the way I approach my work and to the agency and the industry. That is where the real value lies.” For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, Remarks At SEC Speaks 2020 by Commissioner Elad L. Roisman Summary - SEC Commissioner Elad L. Roisman recently discussed SEC enforcement efforts. Roisman indicates that enforcement of the securities laws “is not a partisan matter. The vast majority of the Commission’s votes on enforcement matters are unanimous, bringing together those of us who may have stark disagreements on particular policy issues. Yet, each Commissioner approaches consideration of enforcement cases differently, and we do not always agree on every aspect of every case.” For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, An Update on FY 2020 Results - Remarks at SEC Speaks by Chairman Jay Clayton Summary - SEC Chairman Jay Clayton recently discussed the results from the agency’s fiscal year 2020. Clayton indicated that he is pleased to report regarding the SEC “that while the pandemic significantly impacted how we do our work, it did not negatively impact the work itself. Our planned oversight, examination, rulemaking, and enforcement work continued with vigor, rigor and transparency. At the same time, we added to our work load. We (1) provided targeted regulatory relief to ensure the continued operation of our markets, (2) worked continuously with our domestic and foreign regulatory counterparts to monitor and mitigate the impacts of COVID-19, and (3) increased oversight and engagement in key areas of stress.” For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, The Car Talk of Capital Raising by Martha Miller, Advocate for Small Business Capital Formation Summary - Martha Miller, Advocate for Small Business Capital Formation, recently discussed the SEC’s Office of the Advocate for Small Business Capital Formation efforts to promote small business capital formation. Miller indicates that the “current COVID-19 challenges are testing much of the capital raising ecosystem and are highlighting both its strengths and vulnerabilities. We are continuing to focus not only on longstanding capital raising issues, but also on timely issues presented by 2020’s curveballs.” For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

SEC Staff Speech, Investing in the Public Option: Promoting Growth in Our Public Markets Remarks at The SEC Speaks in 2020 by Commissioner Allison Herren Lee Summary - SEC Commissioner Allison Herren Lee recently discussed the state of public markets and public offerings of stock. Lee indicated that in addition to “reliable disclosure, investing in the public markets brings myriad other benefits for investors. They typically have more ready access to liquidity in the public markets, for example, either to invest additional capital or to exit an investment when it no longer serves their investment or diversification goals. And, importantly, public offerings provide reliably positive risk-adjusted returns for investors over time.” For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Critical Audit Matters – PCAOB Publishes Interim Analysis Report on Initial Impact of Critical Audit Matter Requirements Summary - The PCAOB has published an Interim Analysis Report on Initial Impact of Critical Audit Matter Requirements. The PCAOB has released this interim analysis report and two accompanying white papers analyzing the initial impact of the Critical Audit Matters (CAM) requirements. The PCAOB has also made available the CAMs dataset used in its analysis. The interim analysis report and white papers are part of an ongoing evaluation of the overall effect of the CAM requirements on key stakeholders in the audit process. Staff of the PCAOB's Office of Economic and Risk Analysis conducted extensive stakeholder outreach and performed large-sample statistical analysis to provide an initial understanding of: Audit firm and audit engagement team responses to the CAM requirements. Investor use of CAM communications. Audit committee and preparer experiences related to CAM implementation. Key findings from the PCAOB staff's analyses include the following: Audit firms made significant investments to support initial implementation of the CAM requirements. Investor awareness of CAMs communicated in the auditor's report is still developing, but some investors are reading CAMs and find the information beneficial. The PCAOB staff has not found evidence of significant unintended consequences from auditors' implementation of the CAM requirements for audits of large accelerated filers in the initial year.  For more information, click here. © 2020 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Tax Updates

The IRS Commences New Electronic Processing and Signature Options for IRS Professionals and Taxpayers Written by Tabitha Ford, Tax Senior at MaloneBailey, LLP   Summary -   In light of the new COVID-19 pandemic, many employers have had to consider the health risks to their employees. The IRS is no different and according to Sharyn Fisk, Director of Office of Professional Responsibility with the IRS in CL-20-06: A Closer Look says, “A critical lesson for the IRS reaffirms our current path: Digital options for taxpayers, tax professionals and our employees are fundamental to tax administration.” Currently, many forms are submitted by paper to taxpayers and IRS professionals in both directions. The IRS is currently working towards new processes and improvements to modernize their operational structure to be more digitized, officially taking advantage of the technological advancement our economy has enjoyed for well over a decade already. The IRS has admitted to the following plans for 2021 and making complete digitization a possibility: In January 2021, Forms 2848 and 8821 will now have the option to be submitted electronically. Taxpayer authorizations will be secured through Secure Access username and password or complete a Secure Access registration to authenticate their identities. Taxpayers and professionals can now sign the forms electronically or with ink, and then upload the image of the form to the IRS. Not only will forms 2848 and 8821 have the option of electronic submission, a new platform called Tax Pro Account will allow tax professionals to electronically initiate and sign an online third-party authorization form; however, electronic signatures will not be accepted for mailed or faxed authorization forms. Electronic signatures will only be allowed through: Upload on IRS.gov, Electronically via Tax Pro Account   If you would like additional information regarding electronic signatures or authorizations, please feel free to contact our Senior Tax Manager, Nicole Zhao.

Extra Crunch

New York Stock Exchange's Walk This Way Behind the Scenes of Some of the Most Fascinating Workplaces Summary - The NYSE offers Walk This Way, "a digital-first program that features CEOs of well-known companies taking viewers through their workspaces, giving them a first-person look at how they’re literally building for the future." Hear from a variety CEOs that include but are not limited to NASA, Ancestry, Shake Shack, SAP and more! For more information about the podcast and to subscribe, please click here.

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