Changing times present challenges: in the following, a former SEC chief accountant candidly comments on the general business, regulatory, investment and pension environment and what might influence the SEC's decision on converging U.S. GAAP with IFRS.

• Author: Turner, Lynn E.
• Position: International Financial Reporting Standards - Securities and Exchange Commission - Generally Accepted Accounting Principles

Chief financial officers, controllers and other members of financial management are facing challenging and changing times unlike any seen for decades. Shrinking revenues, employee and expense reductions, deleveraging of balance sheets and doing more with less are now common daily themes for businesses. At the same time, financial teams have to stay on top of significant risks while managing the company's financial stability.

Investors are also asking tough questions of management these days. Those investors, who provide capital to business, are also finding these times equally challenging. As a result, it is helpful for financial management to better understand what is keeping investors up at night and influencing how they view the world.

Investors must rely on investment returns to build up their retirement accounts to acceptable levels. In fact, 60 percent or more of the payments a pension plan makes to its investors and retirees will come from investment returns with the remainder coming from employer and employee contributions.

During the past decade, for many pension plans it was assumed they would earn rates of return in a range of 8 percent to 10 percent when calculating how much they needed in contributions from employers and employees.

But actual returns have fallen way short of that mark during the past decade. The shortfall has resulted in insufficient assets due to subpar investment returns and lower contributions than what should have been made.

Individuals' 401(k) and similar defined contribution accounts are also falling short of being adequate. Workers with money in 401(k) savings accounts from 2003 who have stayed with the same plans had average account balances of $109, 723 in 2009, according to the Employee Benefit Research Institute and the Investment Company Institute. Yet this amount is woefully short of how much one will need to live on if they retire at age 65, as the average life expectancy today is 78.

With the Social Security Administration calculating the average annual wage for Americans in 2009 at $39,055 (down from 2008), many Americans are simply unable to save enough to retire on. This means they must rely on Social Security, which represents about 40 percent of the income of all elderly.

As a result, corporate and public pension funds, as well as baby boomers with 401(k) accounts, are feeling the heat to generate greater investment returns--and now. As America ages and baby boomers begin withdrawing money from the markets rather than investing, they are less likely to take a long-term perspective as their need for cash during retirement grows each year.

Since many asset managers have a significant portion of their compensation based on annual returns, retirees are also likely to ask the "what have you done...