The American Institute of CPAs and Financial Executives International have written to Congress to express their objections to proposed legislation that would displace the SEC from its role of overseeing the Financial Accounting Standards Board.

The letters come in response to a proposal from Congressman Ed Perlmutter, D-Col., to amend the Financial Stability Improvement Act of 2009 to create a Federal Accounting Oversight Board as part of a systemic risk regulator.

“The AICPA firmly believes that the efforts and activities of the FASB should remain under the oversight of the United States Securities and Exchange Commission,” wrote AICPA president and CEO Barry Melancon in a letter to House Financial Services Committee Chairman Barney Frank, D-Mass. “The missions of the FASB and the SEC operate in harmony, with both entities focused on ensuring that U.S. capital market participants receive the best possible financial information on public companies so that current and potential investors can make decisions and allocate capital efficiently.”

Perlmutter's approach would allow a new systemic risk regulator to shoulder responsibilities for overseeing accounting standards. “Those agencies being contemplated to oversee systemic risk do not have the same focus on the importance of the U.S. financial reporting system related to the setting of accounting standards for public companies,” added Melancon. “This will impair the quality of information received by investors because factors other than the primary needs of investors will be taken into account when the proposed board oversees accounting standards. We are concerned that investors will not fare well under such a scenario.”

Arnold Hanish, chairman of FEI’s Committee on Corporate Reporting, also wrote to Frank to oppose the move. “Acting on such proposals to realign oversight of the Financial Accounting Standards Board could change the objectives of financial reporting, harm U.S. capital formation, and potentially politicize the process of setting accounting standards,” he wrote. “The missions of bank regulators and accounting standard setters, although often complementary, are different in their purpose.”

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