August 1, 2008
Grant Thornton LLP Strongly Supports Report of SEC Advisory Committee on Improvements to Financial Reporting
Grant Thornton LLP has endorsed the recommendations of the SEC Advisory Committee on Improvements to Financial Reporting (CIFiR), calling the committee's report a catalyst for future action to make public company financial reporting more relevant, accessible and reliable.
"Grant Thornton LLP enthusiastically supports the recommendations in the CIFiR final report," said Grant Thornton LLP CEO Edward Nusbaum. "Our hope is that the CIFiR's work will be a catalyst in stimulating future action to make public company financial reporting more relevant, accessible and reliable." Nusbaum was a member of the Committee and its Subcommittee on Audit Process and Compliance.
The firm filed a comment letter to the SEC upon release of the final report, in which it offered additional observations on some of the recommendations. The letter focused on its particular support for:
-- CIFiR's emphasis on the importance of building investor views into many of the most pressing issues and decisions, specifically the recommendation that the SEC and FASB should develop a disclosure framework to integrate disclosure requirements into "a cohesive whole," the suggestion calling for more investor influence in standard-setting, and the principle that materiality must be assessed in terms of investor's views about the "total mix" of available information.
-- Recommendations to improve reporting related to restatements, particularly those related to enhanced disclosure during the "dark period" caused by the restatement process.
-- Recommendations that call for the SEC to issue a statement of policy articulating how it evaluates the reasonableness of accounting judgments, and the PCAOB to issue similar guidance related to auditing judgments and its evaluation of these judgments in the conduct of inspections and enforcement actions.
-- Suggestions related to the delivery of financial information, particularly the call for mandatory data tagging through XBRL and additional reporting of key performance indicators.
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