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SEC/Public Company Update 
June 2013

Greetings!

Welcome to Warren Averett Pender Newkirk's SEC/Public Company Update newsletter. We are dedicated to providing our clients and friends with timely, valuable information. When legislation occurs or commentary is made that may impact public company operations, we will offer summaries and guidance through this periodic newsletter.

PCAOB Reproposes Standard on Related Party Transactions

On May 7, the PCAOB reproposed auditing standard, related parties, and related amendments, including amendments regarding significant unusual transactions.

 

According to a report from the Journal of Accountancy, "the reproposed standard is designed to increase the auditor's focus on the evaluation of how a company identifies, accounts for, and discloses its relationships and transactions with related parties. The reproposed amendments, meanwhile, are intended to help the auditor identify and evaluate a company's significant unusual transactions. In addition, the reproposed amendments would require the auditor to perform new procedures as part of the process to assess the risk of material misstatement in the financial statements.

 

These procedures would give the auditor an understanding of a company's financial relationships and transactions with executive officers, the PCAOB said. But the auditor would not be required to make any determination or recommendation regarding how reasonable the compensation arrangements are.

 

Several changes in the new proposal include:

  • Clarifying the relationship of the proposal with the PCAOB's existing risk assessment standards.
  • A requirement to evaluate whether the company has properly identified its related parties and its relationships and transactions with related parties.
  • Removing the requirement that each related-party transaction previously undisclosed to the auditor by management be treated as a significant risk."

Comments, due July 8, can be made at the PCAOB's website. If you have questions about this or any other matters, contact your Warren Averett Pender Newkirk partner, or any member of our SEC Practice Division at (813) 229-2321.

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On January 1, 2013, Pender Newkirk & Company joined forces with Warren Averett, LLC. Warren Averett has grown substantially over recent years to become one of the largest accounting firms in the Southeastern region, ranking among the top 30 firms in the United States.
 
With more than 800 employees and 350 CPAs, our firm offers clients depth and experience in a variety of industries including healthcare, manufacturing, financial services, construction, real estate, aerospace and defense, life sciences and technology, nonprofit and public sector, with services that span beyond audit and tax to include wealth management, staffing and recruiting, technology consulting, financial outsourcing and retirement plan administration and investments.
 
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SEC Practice Division
Warren Averett Pender Newkirk
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