FASB Summarizes Forums Held on the Effectiveness of Disclosures
The FASB as well as the CAQ have together summarized the observations made on the 2 forums that are related to effectiveness of disclosure and has issued a report on the same. The forums, which were organized at Columbia University’s Center for Excellence in Accounting and Security Analysis located in New York on the 4th of October and the Stanford University Graduate School of Business situated in Stanford on the 8th of October, were designed to assist discussions that were held by numerous stakeholders of finance related reporting. They discussed on ways of improving disclosure effectiveness in finance related statements as well as the other sections of the finance based reporting.
Their discussion focused on certain portions of the Financial Accounting Standards Board’s invitation that was recently announced for collating comments on the structure of the disclosure as well as other finance reporting related matters. The participants who were invited to share their comments included members of the corporate board, members of the audit committee, users and preparers of statement, attorneys, auditors, standard setters, academics and regulators.
Some of the other issues that were addressed via the forums included role played by the notes, flexibility of disclosure related requirements, relevance of disclosure for creditors and investors, streamlining disclosure in the existing environment, impact on the future cash flows assessments for the investor, overlapping of Management’s Analysis and discussion and notes, existing accounting guidance’s nature and incentives, costs and benefits for changing.
It must be noted that the FASB is responsible for setting financial reporting and accounting standards. The standards created by them are used for preparing finance related reports and are further recognized by the SEC and the AICPA.
On the other hand, the CAQ (Center for Audit Quality) essentially focuses on improving public trust and confidence of investors in the international capital markets. The Center for Audit Quality encourages auditors of public entity and also collaborates and convenes with stakeholders to discuss critical matters that require both intervention and action. The CAQ also advocates standards and policies, which can help in promoting the objectives, responsiveness and effectiveness of the auditors of public entity to the existing conditions of the market.