The Financial Accounting Foundation (FAF) has granted stakeholders in the financial reporting community the opportunity to raise potential concerns about compliance with the due-process procedures of the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB).
Through the FAF website, stakeholders can now flag for the FAF’s Oversight Committee alleged failures of either board to follow the due-process procedures outlined in the FAF bylaws. To correspond with the FAF Oversight Committee, individuals will be required to provide ‘reasonable specificity regarding an alleged failure by either board to follow due process on an authoritative standard-setting project.’ The FAF would prefer that the specific provisions of the bylaws that have been violated be cited.
“We believe adding this new procedure is a natural next step in strengthening the oversight process,” said FAF Trustee and Oversight Committee Co-Chair Timothy Ryan.
While correspondence can be anonymous, it will not be possible for the committee members to direct follow-up questions to anonymous authors. If the reports raise meaningful due process issues, the committee will proceed with an investigation. Further, if the FAF determines that the FASB or GASB did not follow their due process, FAF trustees will deliberate what action is necessary on a case-by-case basis.
“Soliciting stakeholder perspectives has always been a vital part of our governance model, just as it is to FASB’s and GASB’s standard-setting processes,” added FAF Trustee David Lillard, co-chair of the Oversight Committee.
Stakeholders can find the correspondence form on the FAF website and should only use it to address concerns about due process. The form is not meant to field questions about the outcome or progress of a particular standard-setting project. Those concerns should be directed to the FASB or GASB through their standard stakeholder outreach channels.
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