USA FASB and Government

[Oliver]

To what extent should the members of the FASB yield to governmental pressures in their standard-setting process? Are the users’ interests best served when the standard-setting process becomes politicized? How does a member of the FASB avoid succumbing to political pressures? What are the relevant ethical considerations? Who benefits and who loses by the politicization of the accounting standard-setting process?

 

[B. John Jones]

Well, you're asking a question about yielding to government (which should be obeyed unless it breaches constitution), but then you question government on the basis of politics. Government and politics are two different animals. The complaint that is indeed valid is against the political process. So you and I are to blame.

The FASB should have nothing to do with politics.

 

[kirby]

Consider that government "allows" the professional accountants (FASB) to promulgate standards ---up to a point. Note that there are examples in history which showed that the "independent" accountants kowtowed to their clients UNTIL government stepped in and enforced standards that made more sense. (Look up Stock option accounting) .

 

[B. John Jones]

Consider that government "allows" the professional accountants (FASB) to promulgate standards ---up to a point. Note that there are examples in history which showed that the "independent" accountants kowtowed to their clients UNTIL government stepped in and enforced standards that made more sense. (Look up Stock option accounting) .

But isn't the principle, supposed to be at work, that accounting standardization is hands-off, as far as government is concerned, EXCEPT, when and where the profession itself is deficient in meeting the public need? Government should be obeyed I think; not depended on for standardization.

 

[kirby]

Yes, SHOULD work that way... until it does not. Focusing in on accounting controls: Horrible case in point is Enron and you have a respected major accounting firm engaged in shredding documents. Government steps in with Sarbanes Oxley Act putting in controls the accounting profession COULD have put in themselves, but did not.

 

[B. John Jones]

Yes, SHOULD work that way... until it does not. Focusing in on accounting controls: Horrible case in point is Enron and you have a respected major accounting firm engaged in shredding documents. Government steps in with Sarbanes Oxley Act putting in controls the accounting profession COULD have put in themselves, but did not.

Those controls could be demanded / adopted by the best members of the business community as swiftly as they could by the accounting profession: https://www.accountantforums.com/threads/classic-solutions-to-classic-scandals.164937/