BIG FOUR FIRMS, AICPA SPENT $3 MILLION ON LOBBYING IN THIRD QUARTER
The Big Four audit firms and the accounting profession’s primary trade group spent a total of $3 million on lobbying lawmakers and regulators in the third quarter of 2016, according to quarterly reports filed with Congress.
In July, August, and September, PricewaterhouseCoopers LLP disclosed $600,000 in lobbying expenses, followed by Ernst & Young LLP and KPMG LLP, each of which spent $430,000. Deloitte LLP reported spending $380,000 on lobbying during the quarter. The AICPA spent $1.2 million.
The totals are virtually flat compared to both the prior quarter and third quarter of 2015.
The four firms and AICPA lobbied on a broad range of accounting, auditing, and regulatory reform topics. Each of them reported lobbying during the three-month period on H.R. 5983, the Financial Choice Act, underscoring the broad potential effect of the proposed Dodd-Frank Act overhaul. E&Y, in particular, said it focused on “accounting, auditing, investor protection, and corporate governance issues” in the measure. PL111-203
The Choice Act, introduced by House Financial Services Committee Chairman Jeb Hensarling, a Texas Republican, would scrap large parts of the 2010 Wall Street reform law. Within the bill’s more than 500 pages are provisions to allow banks that hold large enough capital buffers to escape the liquidity and capital standards of Dodd-Frank and the international Basel III accords; undo the orderly liquidation process for large banks and brokerages in Dodd-Frank’s Title II; place regulators under heightened cost-benefit standards for new rules; and strip much of the authority from the Consumer Financial Protection Bureau (CFPB) and the Financial Stability Oversight Council (FSOC), both of which were created under Dodd-Frank.
The Financial Services Committee in September passed the bill on a 30-26 vote.
Also during the third quarter, Deloitte, PwC, EY, KPMG, and the AICPA contacted lawmakers about bipartisan bills that would open up PCAOB disciplinary proceedings to the public. The AICPA has historically opposed the changes, arguing that lawmakers intended for the proceedings to stay private when they drafted the Sarbanes-Oxley Act of 2002.
Rep. Scott Garrett, a New Jersey Republican who chairs the House Financial Services subcommittee on capital markets, recently introduced H.R. 6251, the PCAOB Enforcement Transparency Act of 2016, which would allow the PCAOB to publicize its disciplinary actions against auditors. Today, under Sarbanes-Oxley, the proceedings are kept private unless an accused firm agrees to make them public.
Hensarling’s legislation is mirrored in the Senate by a bill from Sens. Jack Reed, a Democrat from Rhode Island, and Chuck Grassley, a Republican from Iowa.
The Financial Accounting Foundation (FAF), the parent organization of the FASB and GASB, reported spending $110,000 on third quarter lobbying, down from the $140,000 the FAF spent in the prior quarter. Earlier in October, FAF President and CEO Teresa Polley told the FASB and the Institute of Management Accountants (IMA) that the foundation was lobbying against the Choice Act because it repealed the GASB’s self-funding mechanism.
“If the independent source of funding that keeps GASB independent is at risk, it has implications for the organization as a whole, and its mission”, Polley said.