Financial Services: 2016 SEC comment letter trends

SEC comment letter trends Nov 16, 2016

We discuss the recent areas of focus and applicable accounting or reporting guidance in SEC staff’s comment letters issued over the past year to registrants within the financial services industry.



We believe that successful financial reporting is not an event, but rather a process that focuses on continuous improvement. As part of that process, registrants should understand the questions being asked by their stakeholders (investors, analysts, regulators, etc.) and keep current on the SEC staff’s primary areas of focus. As a result, we are pleased to present this year’s edition of our annual publication of SEC comment letter trends developed by PwC’s Financial Services industry groups. This publication discusses the areas receiving the most attention from the SEC staff over the past year and provides examples of comments received by registrants in the financial services industries.

Transitioning to new accounting standards can have a substantive impact on the financial reporting process. As we look forward, we believe that the financial reporting processes of financial institutions will undergo significant changes as a result of the adoption of Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326)

Although not yet effective, the guidance will require registrants to follow a new model, referred to as the current expected credit loss (CECL) model. As a result, processes, systems, internal controls, and disclosures will need to be created or updated, which will require significant lead time to implement effectively. This new guidance, and the SAB 74 disclosures regarding its expected impact, are a significant focus of the SEC, regulators, and investors. As a result, we encourage companies to develop a plan to adopt the CECL model and engage in discussions with your auditors and other stakeholders in order to ensure a successful transition.

We hope you find this publication, Stay informed | 2016 SEC comment letter trends, helpful as you prepare your year-end financial statements and focus on the objective of providing reliable, meaningful, and transparent information to stakeholders.

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Valerie Wieman
Partner, National Professional Services Group

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