[14572]
March 25, 2002
TO: ACCOUNTING/TREASURERS COMMITTEE No. 13-02
SEC RULES COMMITTEE No. 24-02
RE: CHANGES PROPOSED TO STREAMLINE FASB STANDARD SETTING PROCESS
The Financial Accounting Foundation, the body that oversees the Financial Accounting
Standards Board recently issued the attached request for comment on a series of proposed
changes intended to streamline the accounting standards development process. In light of
recent events, the FAF determined that there is a need for the FASB to be more flexible in
responding to change and to increase the efficiency of its standard setting process. The
proposed changes relate to the size and composition of the FASB, the voting requirements to
issue new standards, and the length of comment periods for proposed new standards. In
particular, the FAF has proposed:
• A reduction in the size of the FASB from seven to five members. Traditionally the FASB
has consisted of three members from public accounting, two members from issuers, and
one member each from the investment and academic communities. The request for
comment indicates that the FAF is considering the best mix of representatives from these
communities.
• Eliminating the super-majority voting requirement necessary to issue a new standard. If
the FASB is reduced to five members, the voting requirement to issue a new standard
would be reduced to a 3-2 simple majority.
• Shorter comment periods. The comment period on proposed standards would be
reduced to a maximum of 60 days.
The comment deadline is April 17, 2002. If you have any comments on the proposed
changes, please forward them to the undersigned no later than April 8 for inclusion in a
possible Institute comment letter.
Gregory M. Smith
Director - Operations/Compliance & Fund
Accounting
Attachment (in .pdf format)