New Regulations May Come As A Rude Awakening For Oil Companies

26 Jul 2017   Shale Oil

An agency little-known outside accounting circles recently issued draft rules to change the standards which govern the verification of the year-end oil and gas reserves of public companies. The change would increase the burden of an audit, but the agency sees the need to tighten the scrutiny of such estimates. If they are right, then some companies will see downward revisions of reserves, their single greatest asset, as the rules become effective over about the next two years. The Public Company Accounting Oversight Board ( PCAOB ) governs the auditors which validate the financial filings of public companies in the U.S. It was created along with Sarbanes-Oxley reforms and endowed with the power to license, discipline and revoke licenses for the auditors themselves, and it has become the official gate-keeper of one set generally accepted accounting practices. Both the public companies and the PCAOB answer to the U.S. Securities […]

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