While he conceded that the current financial reporting system needs lots of improvement, Financial Accounting Standards Board chair Robert H. Herz urged members of the profession to make changes at a measured pace.
Speaking to attendees at the American Institute of CPAs National Conference on Current SEC and PCAOB Reporting Developments last week, Herz said that while he agreed with criticisms and suggestions "that there are a lot of areas of accounting and financial reporting that do not properly reflect economics and that need to be fixed," and that the whole reporting framework needs to be modernized in terms of content, timeliness, mode of delivery and use of technology, "the question of the right pace of change" is an important consideration.
"It is very clear that there have already been a lot of major changes recently for the system to handle and that those on the front line, the preparers and auditors are feeling stretched and tired," said Herz. "So, I think we need to be sensitive to the ability of the system to handle further change in a short period."
"Clearly, further changes and improvements are needed, but I think these should be introduced and implemented at a measured pace that enables the system to move forward in an orderly and constructive way," Herz continued. "And I think we have tried to be sensitive to the current demands on people's time and resources by deferring the effective dates of several new standards and by providing extended comment periods on certain proposals."
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