Seidman said: “It is important to note that although the FASB has the responsibility to set accounting standards, it does not have authority to enforce them. Officers and directors of a company are responsible for preparing financial reports in accordance with accounting standards. Auditors provide an opinion as to whether those officers and directors appropriately applied accounting standards. The Public Company Accounting Oversight Board (PCAOB) is charged with ensuring that auditors of public companies have performed an audit in accordance with generally accepted auditing standards, which include an auditor’s analysis of whether a public company has complied with appropriate accounting standards. The SEC has the ultimate authority to analyse whether public companies have complied with accounting standards.“

"The financial crisis led to a reprioritising of the FASB’s work. In particular, financial market participants and policymakers raised questions about:

 

(a) Fair value measurement of assets and impairments, especially when markets become illiquid;

(b) Off-balance sheet risks, particularly those related to securitisations (derecognition) and special purpose entities (consolidation);

(c) Disclosures about risk; and

(d) Complexity in accounting for financial instruments.

 

Accordingly, the FASB has undertaken projects to improve and simplify the accounting standards in each of these areas.“ Seidman then analysed the projects in detail.

 

Finally, he spoke about convergence efforts with the IASB. The FASB’s and the IASB’s target date to complete deliberations on three priority projects—financial instruments, leasing and revenue recognition—is June 30, 2011. With the comment period on those projects now closed, the FASB and the IASB are in the process of reviewing stakeholder input.

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