Insights from SEC and FASB Leaders: A Discussion on Financial Reporting
Baruch College’s 22d Annual Financial Reporting Conference featured opening remarks from Paul Munter, the chief accountant in the SEC’s Office of the Chief Accountant (OCA), and Richard Jones, the chair of FASB. The conference, held on May 2, 2024, provided insights into the current priorities and projects of both organizations.
Munter highlighted the importance of high-quality financial reporting for investor protection. He emphasized the need for clear, transparent disclosures and high-quality audits to ensure accurate information for investors. Jones echoed this sentiment, emphasizing that financial reporting should be viewed as a communication activity, with the goal of helping investors understand the risks and make informed decisions.
Jones also discussed FASB’s current technical agenda, which includes projects on software costs, environmental credit programs, government grants, and more. He highlighted the importance of stakeholder input in shaping FASB’s priorities and decisions.
The discussion also touched on the collaboration between FASB and the International Accounting Standards Board (IASB) in working towards high-quality accounting standards. Both Munter and Jones emphasized the importance of maintaining convergence where possible and working collaboratively on projects of mutual interest.
One of the key projects discussed was the disaggregation of income statement expenses (DISE), which aims to provide investors with a clearer understanding of the components of income statement expenses. Jones noted that this project is a response to investor feedback and is expected to be completed soon.
The conversation also delved into the importance of stakeholder input in the standard-setting process. Munter and Jones highlighted the need to balance the perspectives of investors, preparers, and auditors when making decisions on financial reporting standards.
Overall, the conference provided valuable insights into the current priorities and projects of the SEC and FASB, highlighting the importance of high-quality financial reporting for investor confidence and market integrity.