SEC Chair White Discusses Accounting Standards at FASB Trustees Dinner

At the Financial Accounting Foundation Trustees Dinner, SEC Chair Mary Jo White spoke about the important collaboration between the SEC and Financial Accounting Standards Board ("FASB"). Chair White explained that the unified accounting standards that the FASB creates, and the SEC enforces, provide a clear picture for investors of a company's financial condition. Chair White noted that, while setting unified accounting standards is an important step, there is still work to be done. She explained that implementing standards can be a more difficult task than setting standards. She applauded the recent "implementation group," created by the FASB, which is composed of market participants and stakeholders and serves as a resource to address implementation issues as the transition to a new revenue recognition standard occurs.

Chair White discussed the SEC's commitment to enforcing the U.S. GAAP accounting standards set forth by the FASB. In order to ensure that the issuers are meeting their financial reporting obligations, the SEC formed the Financial Reporting and Audit Task Force in 2013, which focuses on securities law violations involving the preparation of financial statements, issuer reporting, disclosure and audit failures. She noted that the Task Force has made a concerted effort to "develop a deeper understanding" of how FASB standards are implemented, especially in areas that are susceptible to fraudulent financial reporting.

Chair White highlighted the Disclosure Effectiveness Project as another key area where the SEC is focused on enhancing disclosure efforts by determining what information is more useful for investors to disclose. Chair White explained that the project's intention, to make sure that investors are being well served by disclosure, is effected by asking investors, companies, legal and accounting professionals, and other market participants to share their views about improvements that could be made to the disclosure requirements.

See: Chair White's Speech.