The clamor may be dying down following the latest Sarbanes-Oxley (SOX) guidance, but debate over what many see as excessively complex and costly U.S. financial reporting procedures persists in less boisterous tones. Now, Securities and Exchange Commission (SEC) Chairman Christopher Cox hopes to mute the noise even more by addressing these concerns in a 12-month project aimed at reducing some of the confusion–and costs–in U.S. accounting procedures.

"Our reporting system has become overly complex, with the result that financial statements are difficult for investors to understand and expensive for companies to comply with," Cox said in announcing the endeavor and naming 17 industry experts to the newly formed Advisory Committee on Improvements to Financial Reporting.

Cox said that by August of next year, the panel will recommend ways to create clearer accounting rules, provide unambiguous advice on applying those rules and develop efficient methods of communicating financial results to investors. Members will also address how technology can help redesign reporting through XBRL and hyperlinks.

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Cox isn't the only one looking into accounting concerns. Treasury Secretary Henry Paulson has empowered a panel to evaluate the auditing business. The two groups will likely overlap in some areas and share information, Cox said.

In creating this working group, the SEC hopes to assuage peeved financial professionals while still accommodating shareholder rights organizations; a noble goal, say some observers, who nonetheless remain skeptical that a lumbering committee dealing with inherently complex issues can achieve the stated goals in 12 months.

A better plan would be for the Financial Accounting Standards Board (FASB) to state clearly and concisely from the start what its objectives are, says Douglas Carmichael, formerly chief auditor at the Public Company Accounting Oversight Board (PCAOB) and now a professor at Baruch College. He also questions the SEC's motives. "If this is a cover to make compliance easier, that's not a good agenda," says Carmichael.

For now, the future of financial reporting rests in the hands of academics, public policy research officials and CEOs from consulting, rating, accounting and investment companies, who comprise most of the committee.

Members also include three CFOs: Christopher Liddell of Microsoft Corp., G. Edward McClammy of Varian Inc. and David Sidwell of Morgan Stanley. PCAOB Chairman Mark Olson and FASB Chairman Robert Herz are two of five regulators named official observers to the group.

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