ETF News

UPDATE 1-FASB overseers to seek input on new strategic plan

* Could change way U.S. accounting rules are set

* FASB overseers to go on five-city “listening tour”

NEW YORK, June 23 (Reuters) - In a move that could change the way accounting rules are set in the United States, the group that oversees U.S. accounting rulemakers plans to embark on a “listening tour” in the next few months to develop a new two- to three-year strategic plan for its boards.

The Financial Accounting Foundation trustees, who oversee the U.S. Financial Accounting Standards Board (FASB), will meet with small closed discussion groups of investors, auditors, academics and regulators in New York, Dallas, San Francisco, Chicago and Washington, D.C., as well as with the FASB’s standing advisory groups.

“The meetings will be a key building block to our strategic plan,” FASB spokesman Neal McGarity said on Tuesday.

“This outreach process we are undertaking is a continuation of the work the FAF trustees did over the last few years. Although it’s not something new, it’s a strategic and ambitious program to map out the course ahead.”

Among the issues expected to be discussed at the meetings are the convergence between international and U.S. accounting standards, FASB’s relationship with the U.S. Securities and Exchange Commission, the role of the FAF in overseeing FASB’s independence, the size of FASB’s board, and FASB’s governance.

While the timeline is not yet definite, the FAF expects its strategic plan to be released publicly early next year.

The listening tour comes as critics accuse FASB of not having remained independent of political pressure when it changed mark-to-market accounting rules in the past year.

The Investors Technical Advisory Committee, a FASB advisory group, sent a letter to FAF Chairman John Brennan last week saying it believes FASB’s independence has been eroded by the pressure from Congress and the financial industry, who sought to give more flexibility to banks carrying toxic assets on their books. [ID:N22522085]

The FAF and FASB have said that while the board did speed up its due process to make changes to mark-to-market accounting rules in April, it followed a rigorous process.

One of the aims of the “listening tour” is for the FAF to widen the group of investors and other constituents it interacts with, since its last overhaul of FASB’s governance structure in early 2008.

The FAF had acted in February 2008 to downsize FASB’s board to five members from seven and streamline the process for deciding which projects get added to the board’s agenda, but the FAF leadership has changed since then. Brennan, who is also the chairman of the Vanguard mutual fund group, was elected chairman of the FAF trustees in February 2009 and Teresa Polley was appointed president of the FAF in May 2008.

The trustees will also conduct a similar process for the Governmental Accounting Standards Board (GASB), which sets U.S. government accounting rules. (Reporting by Emily Chasan; Editing by Gary Hill)