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Trump administration proposes eliminating pay-gap reporting requirement for companies

Oct 06, 2017

On October 6, 2017, MarketWatch released an article that discussed how the Trump administration proposed scrapping a requirement that companies disclose the pay ratio between chief executives and employees, one of several recommendations outlined in a detailed report on capital markets.

The U.S. Treasury Department (Treasury) said parts of the Dodd-Frank Act should be repealed, among other steps, to promote economic growth and capital formation. "By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow," Treasury Secretary Steven Mnuchin said in remarks accompanying a report on regulation and markets.

The Treasury recommends that Section 1502 (conflict minerals), Section 1503 (mine safety), Section 1504 (resource extraction), and Section 953(b) (pay ratio) of Dodd-Frank be repealed and any rules issued pursuant to such provisions be withdrawn, as proposed by H.R. 10, the Financial CHOICE Act of 2017. In the absence of legislative action, the Treasury recommends that the SEC consider exempting smaller reporting companies (SRCs) and emerging growth companies (EGCs) from these requirements.

Appendix B of the report includes a list of all of the Treasury’s recommendations, including the recommended action, the method of implementation (Congressional and/or regulatory action), and which Core Principles are addressed. 

Review the article on MarketWatch's website and the report on U.S. Treasury Department's website.

WBCSD releases CEO Guide to climate-related financial disclosure

Dec 11, 2017

On December 11, 2017, the World Business Council for Sustainable Development (WBCSD) released the CEO Guide to climate-related financial disclosures.

The new guide, written in partnership with the CEOs of 25 WBCSD member-companies, sets out clear actions that CEOs can take to align their organizations with the recommendations of the Taskforce for Climate-related Financial Disclosure (TCFD).

Review the guide on the WBCSD's website.

What do the Big Data Guidelines Mean for Employers?

Aug 01, 2017

On August 1, 2017, Borden Ladner Gervais released an article on what employers should consider as a result of the release of the "Big Data Guidelines" by the office of Ontario's Information and Privacy Commissioner (IPC) in May 2017.

The Big Data Guidelines are for organizations that engage in the collection, use and analysis of increasingly large-scale bodies of data.

And employers should care about big data because big data tools are valuable for attracting talent, managing productivity, and accurately assessing the effectiveness of one's workforce in increasingly competitive marketplaces. At the same time, employers must take appropriate measures to ensure that the big data tools they invest in are delivering results as promised without crossing legal boundaries that trigger new liabilities. To these ends, the Big Data Guidelines offer numerous valuable points of guidance and direction.

Review the article on Borden Ladner Gervais' website and the Big Data Guidelines on the IPC's website.

Why PSP is releasing its first responsible investment report

Aug 28, 2017

On August 28, 2017, Les Affaires posted a blog in which Stéphanie Lachance, Vice President, Responsible Investment, PSP, explained that PSP Investments published its first responsible investment report and launched the following message to all companies that they can invest in, as well as those companies included in their portfolio: Environmental, social and governance (ESG) criteria are an integral part of their investment process.

Ms. Lachance adds: "It’s not an accessory or an operational function. We expect companies to follow the criteria with the same diligence as the other risks they face. In order to make things clear, we will be sending this report to the companies in which we plan on investing.

Our mandate consists of supporting our asset class managers and making sure they understand the meaning behind responsible investment, so they can integrate these concepts into their investment strategies. These managers are responsible for monitoring their investments—both for financial and non-financial issues. This is entirely their responsibility, as it is not the objective of the responsible investment team."

Read the blog posted on the website of Les Affaires.

Will External Audits Vanish in the Blockchain World?

Nov 02, 2017

On November 2, 2017, the International Federation of Accountants (IFAC) released an article on how external audits won't vanish in the immediate future, but like many of the disruptive transformations taking shape around us with everything going digital, external audits cannot stand insulated.

Blockchain is seen as a solution in every situation where there is need for a trustworthy record. And that is where blockchain’s next big disruption is: its potential application in inter-organizational records, including accounts management.

In a mature blockchain and an artificial intelligence-driven world, investors could—in real-time—have a true and fair view of financials that are inherently trustworthy. This would eliminate the need for external audits in its current form.

Does this really mean external audits would be extinct?

Not really. First, as it stands today, blockchain suffers from lack of clarity in its administrative framework. In addition, the internal controls surrounding origination and creation points for transactions and configuration of smart contracts and mining may always be a cause of internal control concern and need to be audited. 

Transformation of external audit

One can say with some certainty that the external audits in a blockchain-driven world will need to shift focus from transaction based audits to audit of internal control design and change management.

Review the full article on the IFAC's website.

Women CEOs Speak: Strategies for the next generation of female executives and how companies can pave the road

Nov 30, 2017

In November 2017, the Korn Ferry Institute released a publication asking when roughly 94% of Fortune 1000 CEOs are men, what qualities drive the 6% who are women to the most elite reaches of corporate leadership?

To find out, the Korn Ferry Institute studied 57 women who have been CEO—38 currently and 19 previously—at Fortune 1000-listed companies and others of similar size. We analyzed structured interviews with all 57 women and the results of psychometric assessments taken by two-thirds of them.

Review the publication on the Korn Ferry Institute's website.

XBRL makes steady advances

Jul 14, 2017

On July 14, 2017, Accounting Today released an article discussing how Extensible Business Reporting Language (XBRL) is starting to become more widely used, thanks to the SEC’s rules requiring the use of XBRL in financial filings in recent years and a new rule requiring XBRL for foreign issuers.

XBRL technology uses a data-tagging format that is supposed to make it easier for investors and analysts to compare financial information across companies and industries. Problems with the technology and the inconsistency of the tags used by companies have limited XBRL’s usefulness to many investors, however.

Lou Rohman, vice president of XBRL services at Merrill Corporation, said “The group has issued three sets of rules now and approved them. Now our focus is going to go into topical areas of disclosures, such as the cash flow statement and stock-based compensation disclosures. We’re focusing on how we can get people to tag those consistently and do it error free. We’ll provide rules and guidance.” He believes the quality of the XBRL filings has been improving but still isn’t ideal.

The SEC’s proposal for Inline XBRL could potentially expand the usability of XBRL for auditors and investors. “It’s not a final rule,” Rohman cautioned. “It’s still being discussed. The interesting part about that is the audit requirement. The paper-based financial statements and the XBRL-based ones were separate, so the auditors audited the traditional HTML paper-based financials and they would say we have not touched the XBRL. Now the two are combined into one document, so the auditors in some respect have to say, ‘I audited this piece but not that piece of the same financial statement document,’ which is kind of odd to see. We’re watching that to see if there will ever be an audit requirement for XBRL tagging. Technically the legal liability for XBRL is the same as the legal liability for traditional paper-based financial statements that are issued.”

Review the article on Accounting Today's website.

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