September 1998 Issue

FASB GETS NODS OF APPROVAL AT 25TH ANNIVERSARY

At a recent conference, The Financial Accounting Standards Board: An Appraisal at the Quarter Century Mark, representatives from academia, government, and the business community spent two days exploring FASB's creation, accomplishments, and challenges ahead. While speakers expressed various views on FASB's handling of the many technical issues it has addressed over the last 25 years, there was a general consensus that that the board has done a good job. As one speaker stated, "Even when we point out the faults, we all acknowledge we are criticizing the best standards-setting system in the world."

Sponsored by New York University's School of Law and the University's Vincent C. Ross Institute of Accounting Research, the conference was academic in nature, with in-depth, two-hour panel discussions on the Creation of the Board: Problems and Expectations; Independence: Relations with Regulators, Preparers, and Users; Current Issues; Prospects for Global Harmonization; and two separate sessions on the board's accomplishments.

FASB Chairman Edmund Jenkins, while not formally part of the program, spoke about the board's business reporting project which he hopes will provide a "conceptual framework" on how to strengthen the standards-setting process and better meet users' needs.

Jenkins, who previously chaired the AICPA Special Committee on Financial Reporting which addressed similar issues, remarked that, although the business community is skeptical of the project's potential merits and fearful of pronouncements in this area, he does not intend the study to result in issuing standards. Instead he hopes to add to the discussion and suggest performance measurements and benchmarks for companies to consider to improve their business reporting systems.

"I have found it is a lot easier to make recommendations, and much harder to implement them," Jenkins said with a smile, perhaps alluding to more than just the business reporting issue. Jenkins also commented on the recent challenges FASB has faced from Congress with the introduction of separate House and Senate bills that attempt to impose restrictions on the private sector standards-setting process. He was grateful for the support FASB received from the SEC, the accounting profession, and much of the business community. He cautioned that, although there is little current activity on the bills, they have not completely died. *

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