June 13, 1989
TO: ACCOUNTING/TREASURERS COMMITTEE NO. 23-89
INDEPENDENT ACCOUNTANTS ADVISORY GROUP
RE: FORMATION OF ACCOUNTING POLICY SUB-COMMITTEE
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As you know, at the last meeting of the full committee I
circulated a sheet asking for volunteers for a new sub-committee
whose function would be to analyze new security types (and any
other issues affecting accounting policy) on a timely basis and
make recommendations to the full committee as to the correct or
most appropriate method of accounting for them. Accounting
recommendations will encompass, where appropriate, book
accounting, income recognition, pricing and SEC yield
calculation.
The purpose of this new sub-committee is to help the
industry establish uniform accounting practices, and to do so on
a timely basis as new issues arise. Although we can't
necessarily establish GAAP accounting on our own, by having the
Independent Accountants Advisory Group review and hopefully
"bless" the recommendations of the sub-committee, after they are
approved by the full committee, we can, in fact, help to
establish GAAP accounting for most issues.
In order to keep the sub-committee small enough to be
functional, it will be restricted to a total of 11 members at any
one time - 8 from fund complexes and 3 from CPA firms. However,
so that everyone who wants to become involved gets a chance to do
so, people will be rotated off the sub-committee periodically, as
follows: the 3 representatives from CPA firms will be replaced
every 12 months; 4 of the initial 8 representatives from fund
complexes will be replaced after 12 months; thereafter, all fund
complex representatives will serve for 24 months from the time
they first joined the sub-committee. This will produce a
staggering of the fund complex representatives and will therefore
result in a degree of continuity from year to year.
Since there were 13 volunteers from fund complexes and 8
from the CPA firms, I put all names from each group in bowls and
drew them out randomly to select the initial members of the sub-
committee. I did, however, reserve one position for myself as
initial chairman to help get the group up and going. I will
rotate off the sub-committee after two years, and thereafter the
group will select its own chairperson each year.
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The initial sub-committee members are:
Fund Complex Representatives Firm Term
Rich Silver, Chairman Colonial 2 years
Sue Cote Prudential 2 years
Jerry Duffy Kemper 2 years
Ed Stevens USAA 2 years
Susan Hughes Janus Capital 1 year
Steve Kearsley Capital Research 1 year
Vin Nave The Boston Co. 1 year
Dave Taylor Federated 1 year
CPA Firm Representatives
Frank Giannetta Touche Ross 1 year
Dick Meyerowich Deloitte Haskins & Sells 1 year
Jim Patranzino Ernst & Whinney 1 year
At the June 20 meeting of the full committee and advisory
group, we will determine the initial agenda for the sub-committee
and set a date for its first meeting.
Richard A. Silver
Chairman