Thursday, March 12, 2009

AICPA Boss Speaks Out at U. S. Chamber of Commerce

AICPA CEO Barry Melancon defended fair-value accounting and argued that accounting standard-setting would be best left outside the federal government in a talk before the United States Chamber of Commerce. Melancon stated that "mark-to-market" accounting added transparency to accounting and recalled few complaints at the time that the standard was adopted. He did leave open the potential for "tweaking" the standard. On another topic, Melancon asserted that the FASB and not the federal government was the appropriate standard-setter for private-sector financial accounting and was noncommittal on a legislative proposal to develop a Federal Accounting Oversight Board. Melancon also briefly mentioned going concern opinions and IFRS convergence, indicating that IFRS questions could appear on CPA exams as early as late 2011.

I do not have any special opinion on "mark to market;" in theory, market efficiency should in most cases handle the information regardless of presentation form; having said that, the market seems to have been affected by an unusual level of panic and emotion over the last several months thus calling normal assumptions of market efficiency into temporary question. I cannot generate euthusiasm over a "Federal Accounting Oversight Board"; hopefully, a thorough job by the present SEC and PCAOB will suffice.


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