US House passes Financial Reporting Transparency Act

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05 Aug 2006

On 25 July 2006, the US House of Representatives passed HR 5024 the Promoting Transparency in Financial Reporting Act of 2006.

The Act would require the US Securities and Exchange Commission (SEC), Public Company Accounting Oversight Board (PCAOB), and Financial Accounting Standards Board (FASB) to give annual testimony, beginning in 2007, updating the House Financial Services Committee on their efforts to:
  • reassess complex and outdated accounting standards;
  • improve the understandability, consistency, and overall usability of the existing accounting and auditing literature;
  • develop principles-based accounting standards;
  • encourage the use and acceptance of interactive data; and
  • promote disclosures in plain English.
Rep. Michael Oxley, chairman of the House Financial Services Committee, said:

This legislation would help our nation's regulators reassess the effectiveness of their regulations governing financial reporting. The SEC, FASB, and PCAOB all have an important responsibility to increase the usefulness of financial disclosures to investors. This legislation would provide an important opportunity for congressional oversight to evaluate the efforts by the SEC, FASB and PCAOB.

The bill has now been referred to the Senate for consideration. Click for:

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