The Financial Accounting Standards Board, which continues to field criticism that it acts too slowly to issue and update accounting standards, sent out a notice this week announcing the formation of a new project on revenue recognition.

The wordy, convoluted press release does nothing to dispel the image of a standard-setting board too bogged down in minutiae to get anything done. But, that’s the least of its problems.

In essence, the new project is being designed to further clarify how revenue should be recognized on financial statements. The FASB noted that revenue recognition problems are the primary cause of financial restatements (a burgeoning bane in the profession until Enron came along and eclipsed it in importance), and says its end goal is to forge "a single accounting standard that would apply to a broad range of industries," according to FASB Senior Project Manager L. Todd Johnson.

Let’s read between the lines here a bit. Post-Enron, the accounting profession is being mercilessly flogged for every current and past misstep or questionable practice and knows that it needs to act decisively to shore up its image and stature, or risk losing its say in the profession.

Cynics might say the FASB is embarking on this project in order to cover the profession’s collective butt. If you point to the murkiness of accounting standards for misapplying revenues, well then, you can hardly blame the poor accountants, who were just trying to do their jobs without the necessary tools.

Hogwash, says Baruch College professor emeritus Abe Briloff. "One would have presumed the independent auditor who is responsible for the judgment calls with respect to their client’s accounting should have been able to determine which revenues were real, and which were specious. Any auditor who still requires guidance from the FASB at that level of accounting concepts and theory ought to turn back his license as a certified public accountant," he says.

He adds that any guidance from the FASB on revenue recognition is more than likely to "somehow or other rationalize past misdeeds."

If he’s right, then FASB is just another facet of a larger problem – the seeming inability of the accounting profession to follow its own rules, and an excessive willingness to point the blame at someone, or something else, rather than taking a long, hard look in the mirror.

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