In what Chairman Christopher Cox termed "a second front in an all-out war on complexity in financial reporting," the Securities and Exchange Commission has formed a Committee on Improvements to Financial Reporting and called on it to formulate specific ways "to reduce complexity and all its costly burdens."The committee will have a year to search for solutions that have eluded standard-setters and regulators for decades. While fears of litigation have led to complex and detailed rules-based standards, a growing demand for simplicity has inspired calls for less specific standards that are based more on principles.

At the committee's first meeting, in August, Cox noted that the country's financial reporting system provides excellent information, but that it is useless if it can't be understood.

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