October 1, 2008

Joint Statement of The Center for Audit Quality, The Council of Institutional Investors and The CFA Institute Opposing Suspension of Mark-to-Market Accounting

“The Center for Audit Quality, Council of Institutional Investors and the CFA Institute – representing the nation’s public company auditors, institutional investors and chartered financial analysts – are united in opposing any suspension of “mark-to-market” or “fair value” accounting. 

Suspending fair value accounting during these challenging economic times would deprive investors of critical financial information when it is needed most. Fair value accounting with robust disclosures provides more accurate, timely, and comparable information to investors than amounts that would be reported under other alternative accounting approaches. Investors have a right to know the current value of an investment, even if the investment is falling short of past or future expectations. 

The Securities and Exchange Commission and the Financial Accounting Standards Board have taken steps to clarify the fair value accounting standard. The proposed suspension is unnecessary and counterproductive. It would not help solve our economic difficulties. Fair value accounting is only a means of communicating information that is important to investors and other market stakeholders, it is not the underlying cause of the current economic crisis.. 

In the interest of investor confidence and the health of our capital markets and overall economy, we urge the SEC to resist calls from those with a questionable commitment to transparency and to reject any proposal that would suspend fair value accounting.” 

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The Center for Audit Quality (CAQ) is an autonomous public policy organization serving investors, public company auditors and the capital markets. The CAQ’s mission is to foster confidence in the audit process and to aid investors and the markets by advancing constructive suggestions for change rooted in the profession’s core values of integrity, objectivity, honesty and trust. Based in Washington, D.C., the CAQ is affiliated with the American Institute of Certified Public Accountants. For more information, visit www.thecaq.org

The Council of Institutional Investors (CII) is a nonprofit association of more than 130 public, corporate, and union pension funds with combined assets that exceed $3 trillion. Member funds are major long-term shareowners with a duty to protect the retirement assets of millions of American workers. The Council strives to educate its members, policymakers and the public about good corporate governance, shareowner rights and related investment issues, and to advocate on our members’ behalf. For more information, visit www.cii.org

The CFA Institute Centre develops timely, practical solutions to global capital market issues. Established in 2004, the CFA Institute Centre builds upon the CFA Institute mission to lead the investment profession globally by setting the highest standards of ethics, education, and professional excellence. It carries forward the organization’s 60-year history of standards and advocacy work, especially its Code of Ethics and Standards of Professional Conduct for the investment profession. More information may be found at www.cfainstitute.org