The chief accountant of the Securities and Exchange Commission of the United States enforces accounting policy, improves public auditors, and ensures financial reporting is done accurately and fairly. This part of the executive branch works closely with private-sector accounting standards boards as a consultant to provide policy guidance moving forward.
James Schnurr currently holds the vaunted position of chief accountant. Accounting Today posted several talking points for Schnurr's to-do list while in office, all in the spirit of accounting. The top concern remains risk in fluid markets that may lead to more financial calamities, and significant financial reporting reform should be Schnurr's major concern as the global economy recovers from the Great Recession.
Improved staff for the chief accountant should include people familiar with financial statements. Decoding thousands of statements on revenue, profits, equity, leases and dividends can become a huge burden for one office to handle. One way to do this is to reform auditors who need to do better jobs of reporting their findings on balance sheets. Better auditors protect future investors.
Mark-to-market values must be implemented to ensure truth-telling in financial statements. Instead of roundabout ways to inflate the books, fair value accounting standards are in the public interest so investors can ascertain where to put their money. Liabilities and equity should be reported as their book values, not the economic values. This provides even more transparency for investors to make better decisions.
Pensions and leases are huge issues on financial reporting. The chief accountant can take the lead, in concert with accounting boards, to place pensions as a more visible part of a company's income. Shoring up standards for leases also creates more transparency instead of having more off-balance sheet financing that hides the true worth of a company's assets or liabilities.
When the chief accountant ended the push to adopt International Financial Reporting Standards, accountants rejoiced. That policy needs to be upheld moving forward. However, Schnurr should work more closely with the IASB to bring American companies more in-line with international counterparts.
New revenue accounting measures for 2017 got the Schnurr administration off to a good start. The top accountant in the land should provide help for accountants and accounting firms that need assistance to update computer programs, purchase software and enlist IT firms to make changes by 2017. When the new standards come online, a lot of behind-the-scenes work must happen before the revenue reporting changes become standard practice.
The chief accountant may not be the most glorious job in the federal government, but the person in this position has a chance to make real reforms based on previous lessons. The Great Recession was a learning tool for federal policymakers, and Schnurr can use that experience moving forward.
Photo courtesy of Alan Cleaver at Flickr.com
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