Document ID: SEC-2007-0879-0001
Agency: sec
Document Type: Notice
Title: Advisory Committee on Improvements to Financial Reporting
Posted Date: 2007-07-02T04:00Z

[Federal Register: July 2, 2007 (Volume 72, Number 126)]
[Notices]               
[Page 36077-36078]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jy07-97]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release Nos. 33-8817; 34-55969; File No. 265-24]

 
Advisory Committee on Improvements to Financial Reporting

AGENCY: Securities and Exchange Commission.

ACTION: Notice of Federal Advisory Committee Establishment and Notice 
of Meeting.

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SUMMARY: The Chairman of the Securities and Exchange Commission 
(``Commission'') intends to establish the Securities and Exchange 
Commission Advisory Committee on Improvements to Financial Reporting 
(``Committee'').
    The first meeting of the Committee will be held on August 2, 2007 
in the Auditorium, Room L-002, at the Commission's main offices, 100 F 
Street, NE., Washington, DC beginning at 10 a.m. The meeting will be 
open to the public. The public is invited to submit written statements 
with the Committee.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Statements

     Use the Commission's Internet submission form (http://www.sec.gov/rules/other.shtml.
); or     Send an e-mail message to rule-comments@sec.gov. Please 

include File Number 265-24 on the subject line; or

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Federal Advisory Committee Management Officer, Securities and Exchange 
Commission, 100 F Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File No. 265-24. This file number 
should be included on the subject line if e-mail is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on its Web site (http://www.sec.gov/rules/other.shtml
). Comments also will be available for 

public inspection and copying in the Commission's Public Reference 
Room, 100 F Street, NE., Washington, DC 20549, on official business 
days between the hours of 10 a.m. and 3 p.m. All comments received will 
be posted without change; we do not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: James L. Kroeker at (202) 551-5360 
Deputy Chief Accountant, Office of the Chief Accountant, Securities and 
Exchange Commission, 100 F Street, NE., Washington, DC 20549-6561.

SUPPLEMENTARY INFORMATION: In accordance with the requirements of the 
Federal Advisory Committee Act, 5 U.S.C. App. 2 Sec. Sec.  1-16, as 
amended, the Securities and Exchange Commission (``Commission'') is 
publishing this notice that the Chairman of the Commission intends to 
establish the Securities and Exchange Commission Advisory Committee on 
Improvements to Financial Reporting (the ``Committee''). The 
Committee's objective is to examine the U.S. financial reporting 
system, with a view to providing specific recommendations as to how 
unnecessary complexity in that system could be reduced and how that 
system could be made more useful to investors.
    To achieve the Committee's goals, between 14 and 18 members will be 
appointed who can effectively represent the varied interests affected 
by the range of issues to be considered. The Committee's membership may 
include officers of public companies; board and audit committee members 
of public companies; accountants and securities lawyers who provide 
professional services to public companies; and investors, among others. 
The Committee's membership will be fairly balanced in terms of the 
points of view represented and the functions to be performed.
    The Committee may be established 15 days after the publication of 
this notice by filing a charter for the Committee complying with the 
Federal Advisory Committee Act, with the Committee on Banking, Housing, 
and Urban Affairs of the United States Senate and with the Committee on 
Financial Services of the United States House of Representatives. A 
copy of the charter will be filed with the Chairman of the Commission, 
furnished to the Library of Congress, placed in the Public Reference 
Room at the Commission's headquarters, and posted on the Commission's 
Web site at http://www.sec.gov. The Committee's charter would direct it 

to consider the following areas:
     The current approach to setting financial accounting and 
reporting standards, including (a) principles-based vs. rules-based 
standards, (b) the inclusion within standards of exceptions, bright 
lines, and safe harbors, and (c) the processes for providing timely 
guidance on implementation issues and emerging issues;
     The current process of regulating compliance by 
registrants and financial professionals with accounting and reporting 
standards;
     The current systems for delivering financial information 
to investors and accessing that information;
     Other environmental factors that may drive unnecessary 
complexity, including the possibility of being second-guessed, the 
structuring of transactions to achieve an accounting result, and 
whether there is a hesitance of professionals to exercise judgment in 
the absence of detailed rules;
     Whether there are current accounting and reporting 
standards that do not result in useful information to investors, or 
impose costs that outweigh the resulting benefits (the Committee could 
use one or two existing accounting standards as a ``test case,'' both 
to assist in formulating recommendations and to test the application of 
proposed recommendations by commenting on the manner in which such 
standards could be improved); and
     Whether the growing use of international accounting 
standards has an impact on the relevant issues relating to the 
complexity of U.S. accounting standards and the usefulness of the U.S. 
financial reporting system.
    The Committee would be directed to conduct its work with a view to 
enhancing financial reporting for the benefit of investors, with an 
understanding that unnecessary complexity in financial reporting can be 
harmful to investors by reducing transparency and increasing the cost 
of preparing and analyzing financial reports. Our expectation is that 
the advisory committee would provide specific recommendations and 
action steps that can be implemented both in the near term and the long 
term.
    The Committee will operate for approximately 12 months from the 
date it is established, unless, before the expiration of that time 
period, its charter is extended or renewed in accordance with the 
Federal Advisory Committee Act or unless the Commission determines that 
the

[[Page 36078]]

Committee's continuance is no longer in the public interest.
    The Committee will meet at such intervals as are necessary to carry 
out its functions. The charter will provide that meetings of the full 
Committee are expected to occur no more frequently than twelve times 
per year. Meetings of subcommittees of the full Committee may occur 
more frequently.
    The charter will provide that the duties of the Committee are to be 
solely advisory. The Commission alone will make any determinations of 
action to be taken and policy to be expressed with respect to matters 
within the Commission's authority with respect to which the Committee 
provides advice or makes recommendations.
    The Chairman of the Commission affirms that the establishment of 
the Committee is necessary and in the public interest.
    Furthermore, upon establishment of the Committee, and in accordance 
with section 10(a) of the Federal Advisory Committee Act, 5 U.S.C. App. 
10a, notice is hereby given that the first meeting of the Committee 
will be held on August 2, 2007 in the Auditorium, room L-002 at the 
Commission's main offices, 100 F Street, NE., Washington, DC, beginning 
at 10 a.m. The meeting will be open to the public. The purpose of this 
meeting will be to discuss general organizational matters, to plan the 
progression of the Committee's work, and to begin discussions about the 
sources of unnecessary complexity and the barriers to investor 
transparency in the U.S. financial reporting system.

    By the Commission.

    Dated: June 27, 2007.
Nancy M. Morris,
Committee Management Officer.
 [FR Doc. E7-12740 Filed 6-29-07; 8:45 am]

BILLING CODE 8010-01-P