Financial Reporting Complexity: Can It Be Reduced?

The Global Accounting Alliance, a group of accounting standard-setting bodies from throughout the world, recently met in New York to discuss complexity in financial reporting. They found some agreement on the desirably of simplifying financial reporting but not much agreement on how to accomplish the goal. Among the concerns expressed with simplifying were disapproval by financial analysts if a long-standing item is removed from the report and the feeling by some U. S. CPAs that complex rules provided some degree of protection against client resistance to auditor adjustments. The SEC's Wayne Carnall said that the agency was studying about 240 comment letters on adopting IFRS and that no decision had been made yet.

The above refrain should sound familiar to tax professionals reading the above; every year, there are complaints about tax complexity and only rarely if ever does simplicity actually occur. Perhaps I'm too cynical, but don't expect simplification until a decision is finally made on adopting IFRS.