Agenda - Council - 05/12/1981 - Laserfiche WebLink

Home

I~\ ,TI-~E WEEK iN REVIEW - 81-19 - 2 - May 8, 1981~ · The existing structure, with some modification, is the most effective way to achieve the objective, without raising any major concerns about the ability to obtain adequate funding for the standard-setting effort. · The framework is already in place within the existing structure to enforce the standards promulgated by the FASB. Taking on this additional responsibility must not interfere with the ongoing activities of the FASB. This requires that additional resources with governmental accounting expertise be incorporated into all levels of the existing structure. Our proposal contemplates greater representation of preparers and users of external financial reports of state and local governmental units in the overall structure of the Financial Accounting Founda- tion (FAF), the Financial Accounting Standards Advisory Council (FASAC) and the FASB. We be- lieve that our proposed structure would have the essential attributes that the Committee has arti- culated for a sound standard-setting structure. The specific5 of our proposol to odd representation of preparer~ and u~ers of external financial reports of ~tate and local governmentol units into the existing FAF/FASAC/FASB 5tructure, as well a~ our other recommendations, ore contained in our letter to the Committee. Copies of our response may be obtained by wrJting to: The Editor The ~¢eel~ in Review Deloitte Haskins & Sells ! 114 Avenue of the Americas New York~ New York 10036 FASB CHAIRMAN ON ACCOUNTABILITY IN TURBULENT TIMES In a recent speech, Donald J. Kirk, Chairman of the FASB, discussed certain significant changes in accountability and financial reporting by both business and nonbusiness entities over the past 40 years. Some highlights: Role of.the Corporation During the infancies of both the SEC and the AICPA Accounting Committee, debate arose over the role of the business corporation in society and, therefore, to whom the corporation should be ac- countable. Some argued that the primary aim of the business corporation is to make profits for its shareholders. Corporate managers, this line argument went, are stewards over the assets that they are managing in behalf of-and for the benefit of--the shareholders. It is to them, therefore, that the corporation is primarily accountable. It was for the benefit of present and potential in- vestors that the Securities Acts were enacted, proponents of this view contended. The other view is that the business corporation should place the public interest at least as high as its shareholders interests-perhaps higher-and that corporation managers may well have to make de-