In December 2005, while I was acting chief accountant at the Securities and Exchange Commission, SEC Chairman Christopher Cox and I both spoke about reducing the complexity of financial reporting. We weren’t the first to mention this, and we weren’t the last, as the topic has been continually discussed in the two years since.
In my current job, at least several times a week, either I remark or my client remarks about how complicated the accounting is. The responses to the Financial Accounting Standards Board’s annual survey of constituents about its agenda contain repeated requests to simplify accounting standards. FASB, the SEC and its staff, preparers, auditors, and investors alike have been asking for requirements to be made simpler, more transparent, and easier to understand. And I would guess everybody reading this article is in favor of reducing complexity in financial reporting.
