While the process employed by OCA staff to address accounting, auditing and auditor independence issues often varies based on the complexity of the issue, available resources, or registrant time constraints, among other variables, the following is a description of a typical process.
Submissions received into the Accounting Group or the Professional Practice Group generally are assigned to a team of OCA staff members. The team members are usually staff members who have experience and knowledge about the topics the company will be discussing with the staff. One staff member is designated the team leader. This person will be the point of contact for all discussions with OCA related to this specific issue, including inquiries about the status of the staff's deliberations. Generally, the team leader will contact the company within 3 days of receiving the submission.
Each team member will read the submission and related accounting or auditing literature. A search of the accounting or auditing literature will be performed to ensure that all relevant references are discussed in the submission. The team will also consider how OCA has previously addressed similar accounting or auditing issues to see if a precedent has been set for the issue at hand or if there is a past decision to which the current issue may be analogized.
The team will exchange preliminary views and will usually create a list of remaining questions for the company and its auditors. The team leader typically will call the company to set up a conference call to discuss the questions and solicit answers. OCA often requests the auditor's contact person also be on the conference call in order to facilitate a comprehensive discussion and the staff's understanding of the technical issues.
During this conference call, the company can expect the team leader to ask someone from the company to briefly explain the issue in order to bring focus to the call. The team will then ask questions and engage the participants in a discussion of factors they see as critical to the analysis, as well as give the company a chance to explain the recommended accounting treatment or auditing resolution. As a result of this call, the company may be asked to prepare additional written correspondence for the staff, perhaps to provide answers to additional questions, to document a complex response that is better understood on paper, or to submit requested items, such as internal financial analyses or relevant presentations to the board of directors or audit committee members. A timely submission of additionally requested items is critical to moving the consultation forward.
If an issue is answered by the accounting or auditing literature or is not unusual, novel or controversial, and is resolved by mutual agreement of the staff and the registrant, then OCA's review usually would end after discussing the issue with the Senior Associate Chief Accountant. If not, the team members may discuss the issue with the Deputy Chief Accountant–Accounting or the Deputy Chief Accountant–Professional Practice.
The team may consult with the staff of the Financial Accounting Standards Board, the PCAOB or national office staff of several non-participating public accounting firms to gather outside opinions and interpretations of the specific issue being addressed. During such consultations, the name and identifying characteristics of the company and transaction are concealed so as to maintain confidentiality. The information gathered during these discussions is only one element in the staff's decision-making process.
Once a decision has been made as to the appropriate resolution for the accounting, auditing or independence issue, the company will be contacted by phone to communicate the staff conclusion and basis thereof. At this point, the company may wish to request a review of the OCA staff accounting, auditing or independence conclusion by the Chief Accountant, which is often accomplished through an in-person meeting between the company and the staff. The company should inform the team leader if it wishes to request such a review.
A company can expect approximately three weeks to pass between receipt of a submission and delivery of a conclusion. Expect more time if the initial submission is incomplete or the follow-up submission is delayed; less if the first submission is thorough and no follow-up submission is required. If at any time in the process company contacts have any questions, they should not hesitate to call the team leader.
Modified: Sept. 28, 2018