For those who think nothing ever gets done in Washington, last week must have been a challenge. From outward appearances, both the SEC and the PCAOB seem to be working overtime, possibly in order to ruin our holiday weekend or at least lay some guilt on us for not spending the weekend reading what they’ve put out.

First, on July 1 the SEC published rule proposals on the last of the so-called Dodd-Frank “four horsemen” (or, as the SEC Staffers called them, the “Gang of Four”) compensation and governance provisions – specifically, clawbacks. It’s too soon for even nerds like me to have gone over the proposed rules in any detail, but at first blush they disappoint in a few respects. Among other things, they appear to call for mandatory recoupment of performance-based compensation whenever the financials are restated, without regard to fault or misconduct; even a “mere” mistake will trigger the clawback. Moreover, neither the board, nor the audit committee, nor the compensation committee will have any discretion or any ability to consider mitigating circumstances. Last (for now), they do not seem to provide any exemptions or relief for small companies, emerging growth companies or the like. Interestingly, equity awards that are solely time-vested will not be considered performance-based compensation for purposes of the proposed rules. Of course, these are only proposed rules, and they will eventually take the form of exchange listing standards rather than SEC rules, but the basic approach is absolute and draconian, and it’s difficult to envision them changing very much.

Second, the SEC issued its long-awaited “concept” release on audit committee disclosure. I’m puzzled by the SEC’s decision to use this approach to rulemaking; I understand that the SEC is testing the waters by talking about possible disclosure “enhancements” rather than just going ahead and proposing them, but if it believes that these enhancements are necessary, why not just go ahead and propose them? I’m hoping that the release indicates the rationale for this approach, but a quick scan reveals no such thing. It’s also interesting (and disappointing) that calls for voluntary disclosure about audit committees – such as those in the “Call to Action” of the Center for Audit Quality – seem to have fallen on deaf ears, as very few companies have provided the types of disclosure suggested by that and other reports. In other words, one wonders if the failure of the issuer community to voluntarily disclose more is what may lead to more explicit requirements.

Down the road apiece from the SEC, the PCAOB acted on June 30 to request comment on disclosure of the engagement partner and other participants in the audit. Actually, this is a request for further comment, as there was extensive comment – much of it negative – on this disclosure a while back. On the same day, the PCAOB issued its own concept release on possible quantitative “Audit Quality Indicators”.

A couple of additional observations on these goings on:

• First, the SEC shows no signs of transitioning to a principles-based approach versus a rules-based approach. This is off-putting for various reasons, including that the latter approach seems inconsistent with the stated goal of achieving more effective disclosure.

• Second, the PCAOB continues to plod on, issuing proposals and concept releases notwithstanding extensive negative feedback. One would think there has been sufficient negative comment on identifying the engagement partner, but that doesn’t seem to sway the PCAOB. Similarly, I attended a meeting of Audit Committee Chairs about 18 months ago at which PCAOB spokespersons whispered that they were working on the AQIs; all I can say is that the folks from the PCAOB must have been grateful that tarring and feathering has gone out of fashion, because the attendees sharply (and I mean sharply) criticized the PCAOB for trying to implement what appears to be a grading system for auditors.

Lest you think I’m in a negative mood, I will point out that the SEC last week reappointed Lew Ferguson for a second term on the PCAOB. I have my issues with the PCAOB, including once going so far as to suggest that it might better be named “SISOP” (as in, “Solutions in Search of Problems”), but I’ve had the pleasure of meeting and getting to know Lew and am pleased to say that he is a gentleman, a scholar and just a plain nice guy.