Conservatism is Back. Wary Auditors, Clients Worry FASB's Herz

Financial Accounting Standards Board chairman Robert Herz told the Financial Times he is concerned that auditors as well as the companies they audit are acting too conservatively when preparing financial reports especially given the Securities and Exchange Commission's (SEC) endorsement of a principles-based approach.

Herz contends that practitioners are hesitant to be more aggressive because accounting maneuvers are being increasingly scrutinized by regulators, lawyers and even the media, according to the paper.