University of Miami Business Law Review
In December 2006, Conrad Hewitt, the chief accountant at the Securities and Exchange Commission (SEC), promised that the issue of complexity in accounting would be addressed early in 2007 and would be a leading focus of work by his office in 2007. The goal in financial reporting is to disseminate transparent, understandable, financial information that fairly presents the financial condition of the reporting company. Oftentimes, however the information public companies disseminate is overly complex, quagmired in legalistic form at the expense of true economic substance, and is devoid of conveying true, meaningful and understandable information regarding the company.
In this regard, the SEC, in conjunction with the Financial Accounting Standards Board (FASB), is making an attempt to remedy this problem by exploring ways to simplify the fragmented and complex accounting regime currently in existence. The goal of this Article is to highlight one aspect of this reform effort that must be addressed to insure success of the SEC's stated objective of a more simplified accounting and financial reporting system. The aspect in question is management and its role in the accounting and financial reporting process.
University of Miami School of Law
The Carrot Approach to Accounting Standard Setting,
U. Miami Bus. L. Rev.
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