Independence in Accounting Standard Setting

Bill proposed to create the "Investor Protection Act of 2009"

This is a public regulatory initiative  public

article

    AAA HQ
    Civil War in Corporate America: Banks Battling the Chamber...
    article posted November 13, 2009 by AAA HQ 
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    title:

    Civil War in Corporate America: Banks Battling the Chamber on Accounting Rules

    citation:

    Ryan Grim (November 13, 2009). "Civil War in Corporate America: Banks Battling the Chamber on Accounting Rules". Huffington Post -

    brief description:

    Amid the ongoing financial regulation overhaul, the banking industry is hoping to pull off a quiet power grab that has eluded its grasp since the Great Depression, by stripping the independence of the board that sets financial accounting standards.

    The move could effectively let banks set their own accounting standards in rough economic times.

    Astonishingly, at a time when the public is crying out for greater regulation to limit excessive risk-taking by financial institutions, the banks are trying to get Congress to agree that the next time there's a big downturn, they should have the ability to alter their accounting standards -- essentially, fudge the numbers -- so that the public and investors won't be able to tell how insolvent they really are. By ignoring their declining asset values, they can avoid the standard requirement of raising more capital.

    The mechanism is contained in an amendment set to be introduced in mid-November by Rep. Ed Perlmutter (D-Colo.) that would move final authority over the Financial Accounting Standards Board (FASB) from the Securities and Exchange Commission to a new body, a so-called "oversight" board, that would include the officials charged with managing systemic risks to the financial markets.

    journal/magazine/etc.:
    Huffington Post
    publication date:
    November 13, 2009