SEC Advisory Committee Finalizes Recommendations

The Securities and Exchange Commission's Advisory Committee on Improvements to Financial Reporting voted Thursday to approve the recommendations in its final report, which the SEC will present publicly on Friday.

The SEC chartered the committee last July with the purpose of examining the U.S. financial reporting system to make recommendations to increase the usefulness of financial information to investors and reduce the complexity of the financial reporting system. The 17-member committee has released several draft reports with recommendations, including the use of interactive data tags in financial statements and increased investor representation on the Financial Accounting Standards Board and the Financial Accounting Foundation.

The committee "has developed proposals that not only would increase the utility of information in financial reports filed with the SEC, but also would enhance the accounting standard-setting process, improve the substance and design of accounting standards, clarify guidance on financial restatements, and describe factors to be considered in making accounting judgments," said Cindy Fornelli, executive director of the Center for Audit Quality, in a statement.

“Our hope is that the CIFiR’s work will be a catalyst in stimulating future action to make public company financial reporting more relevant, accessible and reliable," said Grant Thornton CEO Ed Nusbaum, who was a member of the advisory committee and its audit subcommittee.