Audit Reform Plans May Leave GASB Out in The Cold
Speaking at the 96th annual conference of the Government Finance Officers Association (GFOA), Tom L. Allen, Chairman of the Government Accounting Standards Board (GASB), expressed concern that audit reform proposals being discussed on Capitol Hill could leave GASB out in the cold without adequate funding.
Both the proposed rules announced by the Securities and Exchange Commission and the bill passed by the Senate Banking Committee would establish a new source of funding for the Financial Accounting Standards Board (FASB). FASB and GASB are sibling standard-setters managed by the same parent organization. The parent body, the Financial Accounting Foundation (FAF), currently selects the members of both boards, raises funding for them, and provides oversight of them.
Mr. Allen explained that FAF currently obtains contributions from accounting firms and corporations, including mutual fund companies who hold billions of dollars of government debt. If voluntary contributions from public accounting firms and companies are eliminated, those organizations' voluntary contributions to the GASB could be negatively impacted. "It is my personal hope," Mr. Allen told a reporter, "that we're allowed to continue the way we have been operating."
In his speech to the GFOA, Mr. Allen said funding for GASB is already so tight the Board recently had to cut someone from its staff despite a heavy backlog of projects.