Magazine article The CPA Journal

SEC Proposal for Abbreviated Financial Statements Put on Hold

Magazine article The CPA Journal

SEC Proposal for Abbreviated Financial Statements Put on Hold

Article excerpt

A recent news account reported that the SEC had received over 1,500 comment letters on its proposal to permit abbreviated financial statements in annual reports of qualifying public companies. Most of the comments were negative and, as a result, the SEC Chairman Arthur Levitt indicated the project has been put on hold. In announcing the decision not to proceed with the proposal, he stated that the SEC would continue to explore other approaches to easing the financial disclosure overload that face typical investors. Chief Accountant Michael Sutton reported at a recent meeting of the Financial Accounting Standards Advisory Council that the proposal was strongly opposed by investors. Dennis Beresford, chair of the FASB, indicated that the Board's concerns with the proposal were set forth in a letter to the SEC. According to Beresford, the Board felt the presentation of a complete and full set of financial statements without all the note disclosures would lead to confusion as to what the partial presentation was and how it should be used.

Ray J. Groves, former chair of Ernst & Young LLP, takes a different point of view. …

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