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Paul Volcker and Robert Herz testify at US Senate hearing

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21 Apr 2004

IASC Foundation chairman Paul A.

Volcker and FASB Chairman Robert H. Herz both testified on the importance of independent, non-politicised accounting standard setting before a US Senate committee. The committee is considering possible legislation that would restrict the adoption of a proposed FASB standard that would require recognition of compensation expense for the fair value of stock options given to employees.
  • Click to Download Mr. Volcker's Testimony (PDF 10k).
  • Mr. Herz's testimony can be found on FASB's Website. An excerpt: "Like investors and creditors, Congress and other policy makers need an independent FASB to maintain and improve the integrity of accounting standards in order to obtain the financial information necessary to properly assess and implement the public policies that you favor. While current efforts by certain parties to block improvements to the accounting for equity-based compensation may seem attractive to some in the short run, in the long run biased accounting standards are harmful to investors, creditors, the capital markets, and the US economy." In making his case, Mr. Herz cited IFRS 2 and the "benefit of achieving greater international comparability in the area of accounting for equity-based compensation".

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