When Congress first mandated SOX for public companies, requiring them to document and assess internal controls over financial reporting (ICFR), many executives viewed the requirement simply as a compliance exercise. While some may continue to feel this way, the more successful companies have recognized that a well-designed control system can deliver greater efficiencies to a business. Companies that have successfully ingrained a healthy ICFR process into their cultures realize the most value and best controls for detecting and preventing material errors or fraud in financial reporting.

The FASB issued a proposed Accounting Standards Update (ASU) on August 15, 2019, that would grant private companies, most not-for-profit organizations, and certain small public companies additional time to implement FASB standards on current expected credit losses (CECL), leases, and hedging. The comment period on the proposed ASU extends through September 16, 2019. Refer to their press release for further details. 

According to the press release; The proposed ASU describes a new FASB philosophy that extends and simplifies how effective dates for major standards are staggered between larger public companies and all other entities. Those other entities include private companies, smaller public companies, not-for-profit organizations, and employee benefit plans. Under this philosophy, a major standard would first be effective for larger public companies. For all other entities, the FASB would consider requiring an effective date staggered at least two years later. Generally, it is expected that early application would continue to be permitted for all entities.

Kral Ussery serves US public and private companies to protect and grow shareholder value, as well as non-profits and governments with internal controls and in combating fraud. Download our services flyer.