Thursday, April 26, 2007

FEI Calls For FASB Standards Moratorium

A recent position paper by Financial Executives International asserts that complexity in U. S. accounting standards is damaging competitiveness in capital markets. FEI's "Four" (actually more like five) point program calls for a suspension of new accounting standards, movement to a principle-based standards approach based on FASB's Statements on Financial Accounting Concepts and consistent with IASB standards, mitigating legal liability with special emphasis on class-action lawsuits, balance of investor and outside stakeholder protections with market competitiveness and a "Committee on Complexity as called for by SEC Chair Chris Cox.

A moratorium on new accounting standards would be a welcome relief for almost everybody. I am more skeptical on the balance of market competitiveness/investor protection argument; unless you assume a quite strong degree of market efficiency; FASB and SEC rules do provide some level of protection for smaller investors with limited time and resources to do in-depth research.

3 Comments:

Blogger neilmcintyre.ca said...

Hey Dan, do you have a link to the position paper? I was looking on their website for it and couldn't find anything. Also tried searching Google News but nothing there either. It's possible it's not available online - is that the case?

7:53 PM  
Blogger Dan Meyer said...

Try the following: http://www.fei.org/eweb/DynamicPage.aspx?site=_fei&webcode=fnr_detail&key=8d808324-1a1d-40cf-aa3a-edc41bf53c73 . Sorry, New Blogger does not appear to handle long links as Old Blogger did. Dan

10:46 AM  
Blogger Dan Meyer said...

Trying again: go to the FEI webpage (www.fei.org); then hit the "more financial reporting" phrase right above "peer networking". On the right side of the "Financial Reporting" page, there is a box with the "FEI Four-Point Plan". Hope this works in Canada. Dan

3:02 PM  

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