Accountants often complain about just how hard preparing financial statements in accordance with U.S. Generally Accepted Accounting Principles can be, along with getting clean audit and internal control opinions and surviving scrutiny by the Securities and Exchange Commission and the Public Company Accounting Oversight Board. I agree; all of those things are difficult. But they’re supposed to be. Rigorous accounting is the price for asking investors to fund a company’s operations with little say in how it’s run—which is, in effect, what public companies do.
Standard-setting and rule-making efforts are underway to relax some of the requirements that seem unnecessarily burdensome. And companies can simplify reporting in plenty of ways, such as avoiding complex accounting methods like hedge accounting and pension expense smoothing mechanisms.
