Support for IASB from former SEC Chairmen
15 Feb 2002
Five former SEC Chairmen (Roderick M. Hills, Harold M. Williams, David Ruder, Richard C. Breeden, and Arthur Levitt, Jr.) testified at the US Congressional committee hearing on "Accounting and Investor Protection Issues Raised by Enron and Other Public Companies".
You can download each Chairman's statement:
- Roderick M. Hills, SEC Chairman 1975-77 (PDF 43k)
- Harold M. Williams, SEC Chairman 1977-81 (PDF 22k)
- David Ruder, SEC Chairman 1987-89 (PDF 31k)
- Richard C. Breeden, SEC Chairman 1989-93 (PDF 48k)
- Arthur Levitt, Jr., SEC Chairman 1993-2000 (PDF 18k)
Opening Statements of Committee Members:
- Chairman Paul S. Sarbanes (PDF 24k)
- Senator Daniel K. Akaka (PDF 11k)
Among the points made by the former SEC Chairmen:
- Chairmen Breeden and Levitt supported giving the SEC the authority to adopt other standards when it finds shortcomings in FASB's standards. Chairman Breeden said: "the SEC should be able to adopt International Accounting Standards or standards drafted by other authorities, as well as its own staff, where it finds that FASB standards are not in the interest of investors. The FASB is too slow, standards are too complex, and it is not sufficiently accountable for action."
- In his oral testimony, Chairman Levitt praised IASB's willingness to tackle expense recognition for stock options.
- Chairman Breeden expressed a preference for IASB's "Ten Commandments" approach to principle-based standards in contrast to FASB's "cookbook" approach.
- Chairman Williams noted: "Rule making itself is very difficult particularly as financial activity and economic transactions become increasingly complicated and sophisticated. For example, the FASB has engaged for a number of years in an effort to create a clear standard for disclosing off-the-books transactions and special purpose entities. They have not been able to come up with a rule acceptable to the business community and the profession. That acceptability should not ultimately be the determining factor."