Financial Regulatory Reform
After significant controversy, debate and compromise, President Obama signed the landmark financial regulatory reform legislation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, into law.
With more Republican power in Congress, financial regulatory reform faces an uncertain future, with many provisions facing revisions or repeal.
Highlights of the Dodd-Frank Act
Consumer Financial Protection Agency: CPAs are exempt from oversight of the new regulatory body when they provide usual and customary accounting services. Without this critical exemption, CPAs who provide financial planning, tax planning, tax return preparation and financial literacy education to consumers would be subject to new and duplicative regulation from the new bureau.
Aiding and abetting: The amendment to broaden the reach of trial attorneys was not included in the final bill. The bill includes a GAO study of the potential effects of the aiding and abetting standard.
Sarbanes-Oxley Section 404(b): The bill includes an exemption from audits of internal controls for publicly-traded companies with a market capitalization below $75 million, although the profession had supported continued inclusion so that investors in all public companies would get the same protections.
Independence of standard-setting: FASB maintains its independent standard-setting process, despite efforts to include specific legislative mandates in the reform package.
Securities lawsuits: Fortunately, a study replaced an amendment to overturn a Supreme Court decision issued in June that could have encouraged the filing of securities lawsuits in U.S. courts. OSCPA will monitor this issue as studies can translate into legislation.