There’s a private in my boat and he wears
Pins instead of medals on his coat
Have written about how financial accounting standard-setting is a delegated legislative act. Any legislature can revoke such delegation, and opt to set financial accounting standards through a direct legislative process.
Came across this letter, editorially titled “Analyst overkill”, by Patrick Bloomfield, published in the Financial Post, September 30, 2002, p. FP15:
We all know that North American securities markets have been the scenes of many sings. But, in writing about them, is it necessary to indulge in overkill, as appears to be the popular political and media pastime these days?
…the Virginia-based Association for Investment Management and Research [AIMR], which speaks for analysts around the world, has 58,000 members engaged in securities analysis and university education…
…the AIMR was among those that begged and begged the U.S. legislators to tighten U.S. accounting legislation well before Enron or any of the other scandals broke, but were outgunned by corporate lobbyists.
As an example of the extent to which corporate lobbyists previously ruled the legislators, Senator Joe Lieberman actually introduced legislation in 1993 that would have barred the U.S. Securities and Exchange Commission from enforcing an accounting rule passed unanimously by the Financial Accounting Standards Board (FASB) that would have required corporations to put a fair value on executive and employee stock options and record them as a corporate expense.
Senator Lieberman’s bill was narrowly defeated. But his accompanying resolution, that the FASB’s resolution would have “grave consequences for America’s entrepreneurs” was passed. It effectively killed an accounting proposal that would undoubtedly have ameliorated the excesses to come.
Now we have those U.S. legislators locking the stable door after the horse ha fled by assembling a hasty concoction of regulatory and accounting changes, and setting up de facto courts of their own making to dispatch corporate executives to the stake…
Who sets the scene…