Reducing complexity: Our proposal to address this challenge

June 2011
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Point of view: Reducing complexity: Our proposal to address this challenge

At a glance

Many U.S. accounting standards are more complex than necessary to meet the standard-setter's objective of issuing high-quality standards. Complexity imposes costs on both investors and companies for information that is often neither easily understood nor particularly useful. Opportunities exist to maintain, or even increase, the quality of accounting standards while reducing complexity.

Highlights

  • Complexity imposes costs on both investors and companies for information that is often neither easily understood nor particularly useful.
  • Opportunities exist to maintain, or even increase, the quality of accounting standards while reducing complexity.
  • A standing advisory committee to the board should be created. Its objective should be to advise the board on how to reduce complexity while maintaining quality and improving the usefulness of financial reporting for investors.