Compliance
Supreme Court Rejects Higher Burden of Proof for Overtime Exemptions, Upholds General Civil Evidence Standard
In E.M.D. Sales, Inc. v. Carrera, the U.S. Supreme Court unanimously ruled that employers, when proving that employees are not covered by the overtime exemption under the Fair Labor Standards Act, only need to satisfy the usual civil evidentiary standard of 'preponderance of the evidence,' rather than the higher standard of 'clear and convincing evidence.' The ruling is seen by the legal community as a victory for businesses, helping to unify national standards and reduce litigation risks.
FASB Decides Not to Launch New Disclosure Project for Credit Risk Transfer
FASB unanimously voted on Wednesday (January 15) not to advance a standard-setting project aimed at requiring banks to disclose more information about credit risk transfer (CRT) transactions. Staff recommended against the project during the meeting, citing that existing accounting guidance (such as credit default swaps and purchased guarantees) and SEC Regulation K already require some disclosures. Despite the vote against it, several board members noted fragmentation in overall risk disclosure and suggested considering systematic improvements within a broader agenda in the future.
SEC Sanctions Former Pharmaceutical CFO: Fraudulent Prescription Revenue Case
The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it has settled allegations that Adamis Pharmaceuticals (now DMK Pharmaceuticals) and its former CFO, Robert Hopkins, fraudulently generated revenue through illegal prescriptions and sham consulting agreements. The company agreed to pay $334,314, and Hopkins was barred from serving as an officer of a public company or practicing before the SEC.
Former Silvergate CFO Requests SEC to Drop Accounting Charges
Antonio Martino, former CFO of Silvergate Capital, is requesting that the U.S. SEC drop charges against him for misleading investors after the FTX collapse. Martino's lawyers argue that the SEC's charges lack evidence of personal financial motive and that both the company and Martino had fully disclosed the losses.
PCAOB Investigation Termination and Lawsuit Dismissal Highlight Multiple Challenges Facing the Audit Regulator
Last week, a lawsuit against the Public Company Accounting Oversight Board (PCAOB) was dismissed, following the termination of its investigation into an unnamed Texas accounting firm. This case reflects a series of recent challenges encountered by the audit regulator. The plaintiff's lawyers claimed victory, while the PCAOB downplayed the matter, stating that the dismissal did not address the merits of the case. The case involves challenges to the constitutionality of the PCAOB's investigation procedures, as well as external expectations that the agency may be weakened or marginalized under the Trump administration.
SEC Chief Accountant Departs with Gensler, Paul Munter to Retire on January 24
U.S. Securities and Exchange Commission (SEC) Chief Accountant Paul Munter announced he will retire on January 24, following Chairman Gary Gensler. Munter joined the SEC in 2019, became Acting Chief Accountant in 2021, and was officially appointed to the role in 2023. During his tenure, he issued 22 statements and speeches emphasizing transparency in financial reporting and warning about misleading audits of crypto companies and the decline of professionalism in the accounting industry.
Meta ends diversity programs and cuts DEI team, joining wave of corporate policy rollbacks
Meta has confirmed the termination of several DEI initiatives, including its supplier diversity program, and the disbanding of its DEI team. This move coincides with the company's announcement last week to end its third-party fact-checking program, and is seen as part of a broad adjustment of corporate policies ahead of the incoming Trump administration.
IRS Grants Crypto Holders One-Year Reprieve for 2025 Tax Year
The IRS has provided temporary relief for cryptocurrency holders and corporate finance leaders for the 2025 tax year, addressing the identification of digital assets sold. The notice, issued on New Year's Eve, offers two options for taxpayers to identify assets, but record-keeping remains mandatory. The relief stems from July regulations on broker reporting, with most brokers not yet ready to receive identification instructions.
Ohio Governor Signs Bill Eliminating 150-Credit CPA License Requirement and Creating New Pathways
Ohio Governor Mike DeWine signed HB 238 on January 8, eliminating the state's 150-college-credit requirement for Certified Public Accountant (CPA) licenses and offering two alternative pathways: one requiring a master's degree in accounting, one year of work experience, and passing the CPA exam; the other requiring a bachelor's degree in accounting, two years of work experience, and passing the exam. The law takes effect on January 1, 2026, making Ohio the first state to pass such legislation, aimed at addressing the accounting talent shortage.
FASB Quickly Clarifies Effective Date Wording for New DISE Standard
Following a board meeting on December 18, the FASB issued a clarifying update on Monday, specifying the effective date of the DISE standard: all public companies, including non-calendar-year companies, must adopt it in the first annual reporting period beginning after December 15, 2026, and in interim or quarterly reporting periods beginning after December 15, 2027. This clarification does not alter the original compliance dates and is intended to eliminate misinterpretations caused by ambiguous wording.