Report: FASB to Name Investor Advisory Task Force

The Wall Street Journal reported that the Financial Accounting Standards Board (FASB) is expected to appoint stock-research analysts and portfolio managers from around the country to the task force.

The task force includes asset-management firms like Fidelity Investments,  Putnam Investments, T. Rowe Price Group Inc., Wellington Management Co., Mellon Financial Corp. and Capital Group Cos. The firms will make their staff available to the board to provide feedback on pending rules, the Journal reported.

The FASB in recent years has struggled to obtain feedback from investors and big money managers, the Journal said. Of about 120 comment letters the board recently received about proposed changes to certain tax rules, for example, none was from an investor or investment firm.

Increased investor input could prove helpful in coming months should the FASB decide to put pension accounting on its agenda. Reforming pension accounting could become one of the FASB’s biggest efforts. Some Wall Street stock analysts expect the FASB to add the project to its agenda as early as next month.

“Investors aren’t engaged” in the FASB’s decision making, said Don Young, a FASB board member who helped champion the creation of the new task force. At present, “companies are telling us” how they think accounting standards will affect investors who own their shares, but the FASB wants to hear from those investors directly.

“We want to go to the direct users of financial statements who are placing the money and get more feedback,” FASB Chairman Bob Herz told the Journal. “We’re open to listening to them and anyone else who has constructive advice.”

While the FASB’s existing advisory groups hold regular public meetings, the investor task force will be structured more informally. FASB staffers likely will survey the members once or twice a month about industry-specific rules they are formulating.

The FASB hopes to bring on more firms, including Wall Street securities firms and credit-rating companies, in coming months, the report said.