Financial Accounting Blog

Tuesday, May 25, 2004

Congress vs. FASB. Robert Denham, the Chairman of the Financial Accounting Foundation is expressing grave concern
over the approval of H.R. 3574 “The Stock Option Accounting Reform Act,” by the Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee of the Committee on Financial Services.

“Advancing this bill in the legislative process harms the credibility of America's system for providing transparent and unbiased financial information to investors,” Denham said. “By inserting Congress into the setting of standards for accounting by publicly traded companies, H.R. 3574 would undermine the independence of the Financial Accounting Standards Board (FASB), which Congress recently reaffirmed in the Sarbanes-Oxley Act.”
Denham argues that if special interests believe they can push Congress to pass bills that go against independent accounting principles the accounting system will be compromised.