Speech by Chairman Cox: Making Disclosure More Useful for Public Company Directors
 
June 30, 2008
 

SEC Chairman Christopher Cox gave a keynote address to the Stanford Law School Directors’ College on June 23, 2008, relating to making disclosure more useful for directors. Among various items discussed, Chairman Cox discussed some of the recommendations the Advisory Committee on Improvements to Financial Reporting (formed in July 2007) has made, including: (i) to propose that the determination of how to correct financial statement errors should be based on current investors' needs; (ii) to propose explicit priority setting for new accounting standards and periodic assessments of existing standards; and (iii) to propose moving away from industry-specific guidance to activity-based guidance and reduce the number of alternate ways to account for the same transaction under GAAP.

Chairman Cox also spoke regarding the SEC's efforts and his personal thoughts on how to move toward U.S. GAAP-IFRS convergence and to integrate the U.S. capital markets with global financial reporting. Chairman Cox referenced the concept release in August 2007 that examined whether U.S. issuers should be given the choice of using U.S. GAAP or IFRS, as has already been offered to foreign issuers. Chairman Cox suggested that the U.S. take a more gradual approach to the adoption of IFRS than was done by Europe in 2005 and highlighted the need to update the SEC's IFRS roadmap.

Lastly, Chairman Cox spoke about the 21st Century Disclosure Initiative, the goal of which is to produce a conceptual blueprint by the end of 2008 to overhaul the SEC’s current forms-based reporting system and replace it with a reporting system that meets investors' needs. The purpose of the new reporting system will be to maximize investors’ abilities to use disclosure information quicker, in more ways and with the level of detail that investors want.

http://www.sec.gov/news/speech/2008/spch062308cc.htm