AICPA tells House subcommittee new financial reporting model offers investors better information.Barry Barry, Welsh Barri, town (1991 pop. 45,053) and port, Vale of Glamorgan, S Wales, on the Bristol Channel. Once a major coal-exporting port, its more diversified export products include cement, flour, and steel products. C. Melancon, the AICPA's president and chief executive officer, testified in Mar. before Congress on the need for a new financial reporting model that gets more quality information into the hands of investors faster, thereby enabling them to make informed decisions based on current, rather than only historical, results. He described the foundation that the CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. profession has laid to achieve this goal. Melancon told a hearing of the House Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Subcommittee sub·com·mit·tee n. A subordinate committee composed of members appointed from a main committee. subcommittee Noun on Capital Markets, Insurance and Government Sponsored Enterprises that corporate reporting of financial information via quarterly and annual reports is historically based. "Today, investors, lenders and other users of the information need to make decisions much faster and more often based on what is currently happening and what may happen in the future, in addition to what has occurred solely in the past," he said. The AICPA AICPA See American Institute of Certified Public Accountants (AICPA). has worked for more than a decade to achieve enhanced financial reporting, Melancon said. In 1993, a report by the AICPA Special Committee on Financial Reporting was one of the first to call for a broader "bandwidth" of information from public companies to provide more useful information to investors. "Enhanced financial reporting is no longer just a dream," said Melancon. "Coupled with enabling technologies like the AICPA's XBRL (EXtensible Business Reporting Language) A specification for publishing financial information in the XML format. It is designed to provide a standard set of XML tags for exchanging accounting information and financial statements between companies and analysts. initiative, enhanced business reporting will provide users with the breadth of information they require at the speed they need to be successful in today's economy." Use of XBRL is not the only component required to achieve enhanced financial reporting, Melancon told the subcommittee. "Companies, public accounting practitioners and policymakers still need to consider many elements as the evolution towards a reporting model that meets the needs of today's markets continues to become a reality," he said. Melancon identified two of those elements as simplifying overly complex reporting and converging con·verge v. con·verged, con·verg·ing, con·verg·es v.intr. 1. a. To tend toward or approach an intersecting point: lines that converge. b. international reporting and auditing standards. Melancon concluded by telling the subcommittee that enhanced business reporting and XBRL "are essential to the future of the U.S. economy, the proper functioning of capital markets, and investor confidence. There simply is no excuse for not implementing enhanced business reporting." |
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