US accounting standards boss hits back at critics over pace of rulemaking
The head of the US accounting standards body has hit back at critics who say the organisation is too slow at making new rules, and rejected proposals to give investors a bigger role.
The Financial Accounting Standards Board came under fire last month from a group of investors who said the rules governing financial statements were failing to keep up with changes across corporate America.
The group — an advisory panel to the Securities and Exchange Commission — expressed frustration that the FASB sometimes took a decade or more to draw up a new reporting standard, and it urged the SEC to step in to shake the body up.
“Do you really want to cut any of those steps out?” he said.
The SEC advisory group, whose members include representatives from the hedge fund Trian, the financial adviser Edward Jones and the California pension fund Calpers, demanded the creation of an investor panel to review the FASB’s operations. The SEC is yet to respond to the recommendation.
Capital Group, the $4tn-in-assets fund manager, last year suggested investors should make up more than half the FASB’s trustees, up from one-third now. Auditors and corporate accountants make up the majority.
Jones said investor representation was already “significant” at the organisation.
“We have an open-door policy” for comments and proposals, he said, “and with investors, we’re dragging them through the door all the time.”
This story originally appeared on: Financial Times - Author:Stephen Foley
