FASB, IASB To 'Retriple' Convergence Efforts; Political Pressures Mount
Nov. 18, 2009
FEI Summary

Increased activity on the accounting convergence front took place the last week in October as the chairmen of the Financial Accounting Standards Board and the International Accounting Standards Board announced they intend to accelerate their current schedule of joint board meetings to a monthly basis (by phone or videoconference) to meet the 2011 convergence deadline set in their existing Memorandum of Understanding, as well as the goal specified by the Group of 20 leaders for convergence by June, 2011. 

In remarks at various conferences the last week in October, Robert Herz, FASB chairman and Sir David Tweedie, IASB chairman, reiterated this mesage, and referred to political pressures on the two boards as well. Also speaking  at the October AICPA-IASCF convergence conference were Jim Kroeker, chief accountant of the U.S. Securities and  Exchange Commission, and Paul Volcker, chairman of the President's Economic Recovery Advisory Board and former chairman of IASCF and the Federal Reserve Board. In addition, Herz and other FASB members and an IASB board member spoke at the New York Society of Securities Analysts conference on corporate reporting.

Highlights from the FASB-IASB joint board meeting and remarks at the conferences can be found in the links below.

FASB Summary of Board Decisions, Joint Board Meeting Oct. 26-28
IASB Update: Joint Board Meeting Oct. 26-28
FASB, IASB To 'Retriple' Efforts To Meet 2011 Convergence Deadline (FEI blog)
Kroeker, Volcker on Convergence (FEI blog)
Volcker Heartened by Regulators Reaction to Crisis Warns Against Isolation (Steven Burkholder, BNA Daily Report for Executives. Reproduced with permission from Daily Report for Executives, 208 DER I-4 (Oct. 30, 2009). Copyright 2009 by The Bureau of National Affairs,  Inc. (800-372-1033) http://www.bna.com) 

Political Presure Mounts
As noted in some of the articles linked above, Herz, Volcker and other FASB and IASB representatives spoke on the broad subject of political pressure on each of the boards. 

Separately, BNA's Steven Marcy reported on November 3 that "Political pressures from the United States and Europe that initially drove apart the agendas of the Financial Accounting Standards Board and the International Accounting Standards Board have become the motivation for the boards to intensify their efforts at standards convergence by mid-2011, members of both boards told the New York Society of Security Analysts Oct. 29." See Intensified Joint FASB-IASB Efforts Intended To Counter Political Pressure, Members Say (BNA subscription required).

In related news, a number of bills that could impact FASB oversight have been submitted as part of the U.S. Congress' development of legislation on Financial Regulatory Reform.  These include:

• HR 1349 submitted by Rep. Ed Perlmutter (D-CO) in March, would transfer the SEC's oversight power over FASB to a new organization called the Federal Accounting Oversight Board (FAOB). Perlmutter, along with co-sponsor Rep. Lucas (R-OK), appear to have modified their proposed amendment to some extent, based on the description provided in Perlmutter's Nov. 17 press release, in which he announced his intent to offer the amendment to the House Financial Services Committee's version of the systemic risk bill, and
• an amendment, adopted by voice vote by the House Financial Services Committee on October 27, (shown on this list of amendments on the Discussion Draft of the IPA as Amendment No. 13) sponsored by Rep. Gary Miller (R-CA) which would create a Financial Reporting Forum (FRF).(As originally proposed, it appears the Financial Reporting Forum, consisting of the chairmen of the banking agencies, SEC, FASB, PCAOB and certain others, would not have oversight authority over the FASB.)

FEI’s Committee on Corporate Reporting (CCR) and FEI’s Committee on Private Companies Standards (CPC-S) filed comment letters with the Chair and Ranking Member of the House Financial Services Committee, noting their objection concern with amendments that would impact the independent accounting-standard setting process. (See CCR letter and CPC-S letter.) Several speakers at FEI’s Current Financial Reporting Issues Conference this week spoke out against politicizing accounting standard-setting.

Updated Nov. 18, 2009 by Edith Orenstein, director, Accounting Policy Analysis and Communications, Financial Executives International (FEI). This summary does not reflect FEI opinion unless specifically noted above.