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.