Posted March 29, 2007

The complexity and technical demands of accounting and disclosure standards have increased considerably in recent years.

FEI believes complexity harms the ability of users to financial statements to understand the information provided and impairs the ability of preparers to explain their financial results in a meaningful way. Investors are not well served by the drain on shareholder wealth from the excessively complex compliance process. The capital markets are not well served, and U.S. competitiveness is hindered, when scarce financial resources are not used in value-enhancing business initiatives but to satisfy disclosure and accounting requirements that fail to meet cost-benefit tests.

FEI recommends four steps to address complexity, including a call for all stakeholders in the financial reporting process to come together to form an independent “Committee on Complexity.” Download the recommendations here.