Table: Fixing the Financial Accounting Standards Board
How Robert H. Herz and other reformers plan to shake up the much-criticized FASB
SPEED IT UP
FASB has been known to take decades to write a new accounting rule. Herz will set deadlines to limit the endless staff debates that now bog it down. Rules could pass with four votes instead of the current five.
Now, FASB writes a rule for every permutation of an issue. That allows companies to structure technically correct deals that flout the rules' intent. Herz wants FASB to move to a system based more on principles.
FASB depends heavily on voluntary contributions from big accounting firms. Bills in the House and Senate are expected to mandate fixed contributions from the firms and perhaps Corporate America to bolster the board's independence.