On July 17, 2007, the Securities and Exchange Commission created the Advisory Committee on Improvements to Financial Reporting. The overall purpose of the Advisory Committee is to review and analyze the U.S. financial reporting system to provide recommendations regarding reducing needless complexity and how the system could become more useful to investors.
Now, the Advisory Committee is seeking comments on its discussion paper, which outlines various issues that it proposes to consider. The outline includes the following five key areas of consideration:
- The causes and effect of complexity on financial accounting and reporting standards;
- The standard setting process, which includes GAAP, the characteristics of the Financial Accounting Standards Board and the Board selection process, interpretive guidance by the Emerging Issues Task Force, the SEC and others, and possible changes to the cost-benefit analysis practices of various organizations;
- The existing process of regulating accounting and reporting standards compliance and other factors that result in needless complexity;
- The vehicles that companies use to convey financial information to investors and the systems available to investors for accessing such information; and
- The various international accounting standards and whether such standards should be integrated into the U.S. financial reporting system.
Comments should be submitted within 30 days after publication in the Federal Register. Click here for information on how and where comments may be submitted.