SEC financial reporting advisory committee holds first meeting
06 Aug 2007
The US Securities and Exchange Commission's Advisory Committee on Improvements to Financial Reporting held its first meeting on 2 August 2007 in Washington DC.
- the current approach to setting financial accounting and reporting standards;
- the current process of regulating compliance by registrants and financial professionals with accounting and reporting standards;
- the current systems for delivering financial information to investors and accessing that information;
- other environmental factors that drive unnecessary complexity and reduce transparency to investors;
- whether there are current accounting and reporting standards that impose costs that outweigh the resulting benefits, and
- whether this cost-benefit analysis is likely to be impacted by the growing use of international accounting standards.
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When it comes to giving investors the protection they need, information is the single most powerful tool we have. And surely we can't say we've achieved our investor protection objective if the information is provided in a way that isn't clearly understandable to the men and women for whom it is intended. The truth is, financial reporting has become overly complex. That means not only are financial statements difficult for investors to understand, but also companies incur excessive costs as a result of complying with voluminous and overly prescriptive accounting and reporting rules. Your job is to help end this destructive cycle and get our financial reporting system back to first principles. We're asking you to help us reduce complexity and all its costly burdens. When it comes to financial statements, most investors today probably feel the way Mark Twain did when he said, 'The more you explain it, the more I don't understand it.' That is why we've called on leaders from the private sector to advise us on what really helps. |
