Overall, since its inception, what is your view of the organization and are its original goals being achieved?
BERESFORD: At inception, the major concern about the new FASB was whether it could be truly independent of the business community, auditors and regulators, and most importantly, the SEC. Concern was expressed about the new board by Leonard Savoie, then executive director of the AICPA involving "responsibility without authority."
However, as I observed in comments in connection with the FASB's 25th anniversary, the board has been able to achieve reasonable independence and has not become subservient to the SEC, the business community or the accounting profession.
Further, the Wheat Committee added its expectation that the FASB's work would be research-based in most cases, and it had some mild words of encouragement for a conceptual framework. While not all would agree with the quality of the FASB's efforts in those areas, it has certainly been the direction taken. The board dealt with the topics that were on the initial agenda and has continued to improve financial reporting for the past 40 years.
HERZ: The FASB is a great organization with a very important mission. It's got very good processes and terrific people. It was set up in the light of the Wheat Committee report that was commissioned because of concerns that the prior process wasn't sufficiently independent, open and transparent, and I think certainly it has achieved those goals.
Over time, just like any organization, as the business environment and the world of finance change, so too, the standards have had to change. Some get outdated and some don't work as well as they should have. The FASB has very strong working relationships with the various stakeholder groups in the financial reporting system.
SEIDMAN: The core mission and values of the FASB have remained constant over the past 40 years--our commitment to developing standards that provide useful information to investors, using an inclusive and transparent process.
However, in the spirit of continuous improvement, the specific methods used by FASB have changed, in response to feedback--both positive and negative--and in response to changes in technology.
During my time on the board, the FAF's role has changed, as the funding needs of FASB were addressed by the Sarbanes-Oxley Act. FAF has become more active in its oversight activities and in strategic matters such as international convergence that could significantly affect the independence, scope of responsibility and primary objectives of FASB, depending on what path the SEC decides to pursue.
Our methods of working to achieve international convergence of accounting standards also have changed. Our objective throughout has been to improve U.S. standards and to converge them with international standards. We are still striving to resolve the remaining convergence projects (revenue recognition, leasing, financial instruments and insurance) jointly with the International Accounting Standards Board (IASB). For new projects, we will work with the IASB and other standard setters through the Accounting Standards Advisory Forum (ASAF) and the International Forum of Accounting Standard Setters to share and leverage research, resources, and potential solutions.
Talk about some high points during your time as chair.
BERESFORD: The high point of my time at the board is that it remained in place as the private sector accounting standard setter in spite of efforts by Congress and other parties to reduce or eliminate its influence. Accounting for stock options was by far the most controversial issue faced by the board during my time.
But every issue involved some change...