Via Going Concern: Get Your Finger Out of the Fair Value Jar, PCAOB
Ohhhh PCAOB, I guess I should thank you for offering me endless amounts of material. That's about all you are useful for but hey, it keeps me busy. Not nearly as busy as the poor auditors who've got to fill out your little coloring books and worksheets and whatever the hell kind of busywork it is you want them to spend their time on.
Anyway. I ripped on the PCAOB yet again over at Going Concern today if you're interested:
You know that annoying roommate you had in college who always stuck his finger in your peanut butter jar? That’s the PCAOB meddling in fair value and it won’t be pretty.
On October 14 - 15th, the PCAOB’s Standing Advisory Group (SAG) is slated to meet to discuss the particulars of fair value and starts off by admitting that “The Board has no authority to prescribe the form or content of a public company’s financial statements.” OK, so WTF are they doing then?
For the past couple of years, regulators have nudged auditors to get more skeptical when it comes to evaluating fair-value measurements. In the meantime, the controversial accounting rules governing how companies apply fair value have been tweaked and companies’ use of judgment for assigning fair-value price estimates to their financial instruments has grown.
The Public Company Accounting Oversight Board is dipping into contentious waters again by suggesting that new fair-value auditing rules are necessary. The board’s staff has long contended that the use of estimates based on market value — rather than historical cost — adds uncertainty and subjectivity to financial reporting and an added risk of material misstatements. At the same time, the regulator has been slow-footed on previous attempts to change its rules when it comes to auditing fair-value calculations.
If you want to read the rest, you'll just have to head over to GC to get your fix.
And to the PCAOB (since, you know, I know you're paying attention even if you don't answer my e-mails), please keep this up. Ripping on you never gets old and I appreciate the opportunity to slam you whenever possible. In case you aren't aware, my dear mentor Skeptical CPA also enjoys a little PCAOB-bashing, so don't miss his PCAOB rants. It's all about monitoring what's being said about you in the blogosphere, right? Well there you go. Enjoy, bitches!