A new US act could see the Securities and Exchange Commission lose its sole
responsibility for oversight of accountancy, and give banks a say in how
accounting rules are made.
The Federal Accounting Oversight Board Act would see the creation of the a
board comprised of five regulators, the Secretary of the Treasury, the chairman
of the Federal Reserve, the chairman of the SEC, the chairman of the Federal
Deposit Insurance Corporation, and the chairman of the Public Company Accounting
The proposals have sparked fears that politics is once again interfering with
the standard setting process. The Financial Accounting Standards Board would
operate under the FAOB and several stipulations appear in the bill that stem
from the mark-to-market issues that have so troubled the banks.
When creating standards the FAOB has to consider how standards create
systemic risk exposure to the American public, financial markets, and global
financial markets. The board must also make sure that accounting rules ‘handle
illiquid and liquid assets differently’.
It also states that any standards that have an adverse effect on the US
economy should be reviewed by the FAOB, according to
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day
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The FRC is inviting comments from stakeholders on its proposed approach to updating FRS 102 to reflect changes in IFRS