MEDIA ADVISORY 12/12/12
FASB and Center for Audit Quality Issue Forum Observations Summary on Disclosure EffectivenessNorwalk, CT, December 12, 2012—The Financial Accounting Standards Board (FASB), in conjunction with the Center for Audit Quality (CAQ), today issued a summary of observations from two forums on disclosure effectiveness. The forums were held at Columbia University’s Center for Excellence in Accounting and Security Analysis in New York City on October 4, and at the Stanford University Graduate School of Business in Stanford, California, on October 8, 2012.
The forums were designed to encourage dialogue among a wide range of financial reporting stakeholders on improving the effectiveness of disclosures in notes to financial statements and other parts of the financial reporting package. The discussion focused on aspects of the FASB’s recent Invitation to Comment on a disclosure framework, as well as financial reporting issues beyond the scope of that document.
Forum participants—including financial statement preparers and users, corporate board and audit committee members, auditors, attorneys, regulators, standard setters, and academics—provided insight and feedback on a number of topics, including:
- Flexibility of disclosure requirements
- Role of the notes
- Disclosure relevance to investors and creditors
- Effect on the assessment of future cash flows to the investor
- Streamlined disclosure in the current environment
- Prescriptive nature of current accounting guidance
- Overlap of notes and Management’s Discussion and Analysis (MD&A)
- Costs, benefits, and incentives for change.
More information, including the summary of the forums and the FASB’s Invitation to Comment on the disclosure framework project is available at www.fasb.org.
About the Financial Accounting Standards Board
Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.
About the Center for Audit Quality
The Center for Audit Quality (CAQ) is an autonomous public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness and responsiveness to dynamic market conditions. Based in Washington, D.C., the CAQ is affiliated with the American Institute of Certified Public Accountants. For more information, visit www.thecaq.org.