SEC revives an old mainstay of auditor compliance

For some auditors, the last two decades might have represented the Dark Ages of compliance clarity. Nearly 20 years ago, auditors heavily relied on regular position guidance from the Securities and Exchange Commission via its “Dear CFO Letters.” As of yesterday, the agency has revived the institution, with cuts and modifications to old positions, as well as the addition of one new position from the Chief Accountant’s Office of the Division of Investment Management. As consultant Todd Cipperman says, for a long time, auditors have had to be “explorers” as they navigate various rules to clear their compliance paths. This, he says, is a good start toward making the SEC’s positions transparent, and easily referenced. For years, the agency has used various means of communicating with various industry stakeholders. Now, the SEC once again has a forum to speak to the whole market, in one place.

Perhaps coincidentally, the agency announced John Vanosdall, former PwC partner, as the deputy chief accountant in the Office of the Chief Accountant’s Accounting Group. Former KPMG partner Paul Munter joins as deputy chief accountant, international.

By the way, if you subscribe to sister publication Regulatory Compliance Watch and missed today’s webinar on the SEC’s new proposed advertising rule, be sure to access the on-demand recording. The webinar is approved for 1.0 CLE/CPE credit.

Elsewhere in private funds, four CFOs and three service providers gathered in New York in late October to discuss whether or not bigger means better when it comes to fund administrators, as the years-long binge in M&A in the sector continues. Among the interesting takeaways in this sponsored roundtable is that fund administrators may only just be waking up to GPs’ perspectives on data security. But conversely, GPs may also be only beginning to think about external vulnerabilities. Says Sean Reilly, managing director at Alter Domus: “Your data is everywhere now; it is on your internal networks, it’s on your fund administrator’s cloud; it’s on the audit and tax folks’ cloud. You need to understand how that data is being protected, especially if you are the chief compliance officer.”

Email prepared by Graham Bippart