Will the SEC be abolished, merged, or left as-is? Will IFRS adoption be delayed? What other regulatory issues will affect GRC workloads?

All of these questions will — or at least, should — be answered in the coming weeks. To ensure that none of these answers throw your GRC programs and processes for a loop, CFOs and other GRC executives should be monitoring several developments and sources of influences. Some of these sources of GRC influence may appear surprising.

For example, the decision of whether to merge the SEC with the Commodities Future Trading Commission (CFTC) hinges on how well the Congressional committees overseeing both agencies get along — and less so on the working dynamic between SEC and CFTC leaders and cultures.

Here are four issues I would be monitoring closely if I were a CFO or GRC executive:

• SEC Chair Mary Schapiro’s appointments — specifically the individuals she chooses as the next Chief Accountant and the next head of the agency’s Corporate Finance division. The chief accountant is arguably the most important accounting official in the country — even more important than the head of the PCAOB or the FASB. My contacts involved with federal finance and accounting regulations-setting believe that Schapiro will select a very strong and credible individual for the position, someone more in the mold of, say Lynn Turner or Donald Nicolaisen, than the most recent Chief Accountant.


• The FASB and IASB’s work on accounting standards convergence — perhaps more so than the SEC’s decision on whether to delay IFRS adoption (beyond 2014, as identified in the current road map, which has not been finalized). These two standards boards have been working on convergence for some time, and the work continues. Even if the SEC delays IFRS transition, which seems like an even bet right now, the ongoing convergence continues.


• The Congressional committees that oversee the SEC and the CFTC. These include two well-known, highly visible entities — the House Financial Services Committee and the Senate Banking Committee — and two lesser-known committees — the House Committee on Agriculture and the Senate’s Agriculture, Nutrition and Forestry Committee. Say what? That’s right — the CFTC was created in 1974, primarily to prevent fraudulent trading of futures contracts related to agricultural commodities; in other words grain futures, not financial futures. Whether or not the SEC and CFTC merge has more to do with how well these four committees can play nice than it has to do with how well the agencies can play nice. And money, in the form of committee members’ ability to raise campaign contributions, plays a major role in determining how nicely the leaders and members of these committees can play. If they oppose the merger, the administration would likely need to step in and drive the merger; whether or not that happens, depends on how much human and political capital — precious resources, given the number of large and competing priorities on the President’s plate — the administration can direct to this particular issue.


• Other regulations, specifically Say On Pay and Card Check. Both could have major impacts on GRC programs, and both appear likely to emerge from Congress soon.

There are several other developments to monitor, including the SEC’s decision on auditor attestation (related to controls over financial reporting) for smaller companies. I’ll cover these issues online and in the magazine in the days and weeks ahead.