COMPLIANCE

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On August 5, the SEC announced the creation of a new unit within its Division of Enforcement that will concentrate on “accounting and financial reporting fraud” and “general misconduct in the accounting and auditing areas.” The Financial Reporting and Accounting unit will consist of two teams of attorneys and one team of accountants, some of whom are existing staffers and some who will be outside hires, Bloomberg Tax reported.

David Woodcock, the SEC’s enforcement director, told Bloomberg Tax the unit would “focus on intentional misconduct that poses significant harm to investors.” It seems likely to go after larger, high-profile cases.

Indeed, the creation of the new team appears less like a regulatory shift and more of a “priority signal” on which cases the SEC plans to target, Richard Chambers, senior advisor for risk and audit at GRC platform Optro (formerly AuditBoard), and a former president and CEO of the Institute of Internal Auditors, told CFO Brew. “They’re not really changing any rules around financial reporting,” he said. “It’s really their effort to concentrate some specialized expertise, the attorneys and the accountants, to focus on an area that already has some pretty clear rules.”

The “new” unit isn’t even all that new, Neil Smith, partner and co-leader of the white collar defense and investigations practice at law firm K&L Gates, told us in an email, referring to it as “reconstituted.”

“This is not the first time the SEC has tried for a specialized task force in this area,” Smith observed. The personnel change, he suggests, “signals a return to prior SEC enforcement directors acknowledging that it is beneficial to have dedicated units with expertise to investigate sophisticated financial fraud and violations.”

The new SEC unit will specialize in complex, high-profile fraud cases.—CV

      

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EARNINGS

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You never know what someone else is going through.

Last week, if corporations had feelings, two major big-box retailers would’ve had drastically different emotional states: Target was the eternal optimist; Walmart was, well, that person who tries their best to put on a smile when they’re going through a rough patch.

Whenever the two retailers report earnings, they offer a glimpse into how the American consumer is holding up, and right now, they’re telling different stories. So let’s compare emotional states, shall we?

Words of encouragement. For anyone curious how an “eternal optimist” mindset might manifest in the corporate world, consider this: Target executives used the words “encouraged” or “encouraging” 20 times on the company’s August 19 earnings call, the Wall Street Journal observed.

That wouldn’t necessarily mean glass-half-full on its own, but it does when you add this to the equation: Target executives used those same words 21 times on the company’s Q1 call. Two quarters in a row of feeling “encouraged?” Now that’s some corporate optimism.

Walmart’s second-quarter performance, on the other hand, was just OK.—NP

      

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IT STRATEGY

Allegra Driscroll

A lot can change in a year.

That’s why Bread Financial EVP and CTO Allegra Driscoll often gravitates toward one-year contracts when working with AI vendor partners.

“So much is happening in the environment. Technology is moving so quickly, and we want to make sure that we continue to create the best technical ecosystem that delivers against our business capabilities, and [are] having more frequent opportunities to pivot and refresh who we partner with,” she said.

Driscoll, who has been negotiating software and now AI contracts as part of her career for the past two decades, told IT Brew that she views partnerships with vendors as a “two-way street.”

“The best contracts reflect the way that you want that partnership to work,” Driscoll said. “That spirit of collaboration, that openness, that willingness to pivot, and that you plus ‘new company X’ are better together than apart.”

Driscoll tells IT Brew how to avoid vendor lock-in.—BM

      

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market forces

Francis Scialabba

Today’s top finance reads.

Stat: $17.1 billion. That’s how much Meta could pay in penalties in a “landmark settlement” with 47 states; Washington, DC; and US territories that accused the company of endangering children with addictive products. (New York Times)

Quote: “The CFO needs to have a whole set of processes in place around [AI] governance and ethics.”—Ian Schnoor, executive director of the Financial Modeling Institute (CFO Dive)

Read: Bill Gates is warning us there’s “no plan” to address the amount of societal and economic disruption AI is about to cause. (CNBC)

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Jobs

Skip the noise and cut to the jobs that matter. CollabWORK curates openings from top employers and shares them directly in trusted spaces like CFO Brew—click here to see the full list for readers like you.

• Director of Accounting at Arvato Bertelsmann
• Director of Accounting - Corporate and Consolidations at U.S. Physical Therapy
• Financial Analyst at Micron Technology, Inc.
• Financial Analyst at Warren Equipment Company
• Financial Analyst at GCI Communication Corp