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Accounting Execs Question the Value of Fair Value Rules

Most senior accounting executives don't think FASB's new fair value rules worsened the subprime crisis, but neither do they think the regulations helped investors better understand lending risks

By Staff Writer | Updated on May 20, 2008

Most accountants in senior executive positions don’t blame the Financial Accounting Standards Board’s new fair value rules for worsening the subprime crisis, but neither do they think the regulations do much good when it comes to educating investors about risky lending practices either, according the American Institute of Certified Public Accountants (AICPA).

Only 17% of the 1,400 corporate accounting executives responding to the poll said FASB’s mark-to-market regulations contributed to the credit crisis; 83% said they did not have an impact. Moreover, 65% said the rules failed to achieve FASB’s goal of educating investors about aggressive lending, with only 35% suggesting they helped investors understand the risks beneath the numbers.

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