Watchdog set to open mark-to-market probes

A series of roundtables investigating the role of mark-to-market accounting in the credit crisis will begin tomorrow with Tom Jones, the British vice chairman of the international accounting standard setter, due to support its use.

Jones is listed to take part in a series of roundtables organised by US financial watchdog, the SEC, in Washington. Among the participants will be accountants, including Russell Wieman, an audit partner with Grant Thornton, and Vincent Colman of PricewaterhouseCoopers, alongside investment bankers, insurers and academics.

Mark-to-market, or fair value, accounting has proved highly controversial during the credit crisis with many in politics, business and the media calling for its suspension after blaming it for causing the damage to balance sheets.

The roundtables are charged with examining whether mark-to-market remains useful to investors and regulators, whether it changes the behaviour of key players in the markets and whether it can be improved.

Jones is reported by CFO.com today as saying at a conference sponsored by the New York Society of Security Analysts last week that mark-to-market was ‘lousy’ but the best of what was available.

‘It is a lousy system, but it is less lousy than any other system... and I don't find that the people who criticise fair value have very good ideas for an alternative,’ Jones is reported as saying.