In a unanimous vote, 412-0, the House said that it will require a trio of accounting regulators to provide regular updates on the work being done to reduce the complexity of financial reporting and develop principles-based accounting standards.Through 2012, either the chairmen or other designees from the Securities and Exchange Commission, the Public Company Accounting Oversight Board and the Financial Accounting Standards Board will now provide annual testimony to the House Financial Services Committee.
The Promoting Transparency in Financial Reporting Act was also unanimously passed by the House last year, but never came up for a vote in the Senate.
“[The bill] will give Congress a way to measure progress on the efforts of these organizations over the next five years," said the bill’s sponsor, Rep. Geoff Davis, R-Ky., in a statement.
Specifically, the bill would require the three regulators to comment on:
- Reassessing complex and outdated accounting standards;
- Improving the understandability, consistency and overall usability of the existing accounting and auditing literature;
- Developing principles-based accounting standards;
- Encouraging the use and acceptance of interactive data; and,
- The promotion of “plain English” disclosures.
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