The Financial Accounting Standards Board is refining the role of its Investor Advisory Committee to bring more of an investor perspective to the accounting standard-setting process.
In its revamped format, the IAC will advise FASB on two main areas: generalist issues (such as FASB’s Disclosure Framework, along with hedging, and other broad projects that eventually will be added to FASB’s future agenda) and emerging trends.
FASB has decided to keep the IAC’s existing membership composition, which includes a combination of buy-side and sell-side investors, along with credit and equity firms and ratings agencies. But FASB intends to widen the membership to include people who have experience in academia, particularly those with significant involvement in investor-related academic research and a public or corporate pension fund.
FASB member Marc Siegel will serve as a liaison from the board to the IAC. FASB technical director Sue Cosper and FASB senior investor liaisons Jeff Brickman and Chandy Smith will offer extra support.
Future IAC meetings could include breakout sessions along with public sessions. Investors and other users of financial statements will be able to continue to provide comment letters on key areas.
FASB formed the IAC back in 2007, when it was called the Investors Technical Advisory Committee. FASB periodically reviews the effectiveness of each of its advisory groups, and the changes reflect continuing demands on the board to be more aware of the needs of the investing public.
“Our review of the IAC reinforced the continued importance of having an advisory group dedicated to investors,” said FASB chairman Russell G. Golden in a statement. “It also revealed areas where the IAC input could be most impactful to the FASB—areas we will seek to address by refining the objective of the group.”