Financial Crisis Advisory Group (FCAG)
The International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) have a long-standing commitment to work together in an internationally coordinated manner on improving financial reporting standards. As part of that commitment, accounting issues emerging from the global crisis will be considered by both Boards. The Boards established an advisory group comprised of senior leaders with broad international experience in financial markets to assist in that important process.
The primary function of the FCAG is to advise the Boards about standard-setting implications of (1) the global financial crisis and (2) potential changes to the global regulatory environment. The group will conclude its activities within approximately six months (or less), and will conduct advisory meetings during that time.
The FCAG will be chaired jointly by Harvey Goldschmid, former Commissioner, US Securities and Exchange Commission , and Hans Hoogervorst, Chairman, Netherlands Authority for the Financial Markets. Committee Members of FCAG are drawn from senior leaders throughout the world with a broad experience in international financial markets and an interest in the transparency of financial reporting information. In addition to Committee Members, the FCAG also has invited certain Observers to participate in the discussion.
Areas of Study
The FCAG will consider how improvements in financial reporting could help enhance investor confidence in financial markets. The advisory group also will help identify significant accounting issues that require the urgent and immediate attention of the Boards, as well as issues for long-term consideration.
In providing that advice, the advisory group will draw upon work already underway in a number of jurisdictions on accounting and the credit crisis, as well as information gathered from the public roundtables—one each in Asia, Europe, and North America—that the Boards are hosting in November and December.
The FCAG is invited to discuss, among other issues, the following:
- Areas in which financial reporting helped identify issues of concern, or may have created unnecessary concerns, during to credit crisis
- Areas in which financial reporting standards could have provided more transparency to help either anticipate the crisis or respond to the crisis more quickly
- Whether priorities for the IASB and the FASB should be reconsidered in light of the credit crisis
- Potential areas that require future attention of the IASB and the FASB to avoid future market disruption
- The implications of the credit crisis for the interaction between general purpose financial reporting requirements for capital markets and regulatory reporting, particularly for financial institutions.
- The relationship between fair value and off-balance-sheet accounting and the current crisis, both during and leading up to the crisis
- The findings and relevance of conclusions of various studies underway, including the U.S. Securities and Exchange Commission study under the Emergency Economic Stabilization Act of 2008.
- The need for due process for accounting standard setters and its implications on resolving emergency issues on a timely and inclusive basis
- The independence of accounting standard setters and governmental actions to the global financial crisis.
Structure of the Organization
The FCAG is chaired jointly by two co-chairs—one from each of Europe and North America. The advisory group is comprised of approximately 15–20 senior leaders with broad experience in international financial markets and an interest in the transparency of financial reporting information. Depending on the needs of the advisory group, subcommittees may be formed to consider various issues.
To provide the Boards and others in the financial reporting system with the benefits of their advice, the advisory group generally will meet in public sessions, with webcasting facilities available to all interested parties. The meetings also may involve private sessions at the discretion of the co-chairs.
The FCAG meetings will be held in London and New York on a rotating basis. The first meeting will be in January 2009. Staff support for the advisory group is provided by the IASB and the FASB. Also, advisory members may request to be reimbursed for actual out-of-pocket travel expenses incurred in connection with advisory group meetings if it is their employer’s policy not to provide reimbursement for such costs.
FCAG meetings are the primary mechanism that will provide input to the IASB and the FASB. It is not the advisory group’s role to reach a consensus or to vote on the issues that it considers at its meetings. For that reason, it is important to convene the advisory members as a group so the Boards can hear the individual members’ views and so members can hear and respond to each other’s views.
The IASB and the FASB will provide the staff to document and communicate the input from the advisory group.
If you would like more detailed information about FCAG, call or write:
Jeffrey D. Mechanick, Assistant Director
Financial Accounting Standards Board
401 Merritt 7
Norwalk , Connecticut 06856-5116