Editing Financial Accounting Standards Board (section)

== Criticism ==
=== Mark-to-market ===
{{seealso|Fair value accounting and the subprime mortgage crisis}}
Critics argue that the 2006 SFAS 157 contributed to the [[2008 financial crisis]] by easing the mark-to-market accounting rule and allowing valuation of assets based on their current market price, rather than the purchase price.  Critics claim FASB changes to [[mark-to-market]] accounting were made to accommodate "banks with toxic assets on their books."<ref name="Taub">{{cite web|last1=Taub|first1=Stephen|title=FAS 157 Could Cause Huge Write-offs|url=http://ww2.cfo.com/accounting-tax/2007/11/fas-157-could-cause-huge-write-offs/|website=CFO|access-date=16 November 2017|date=7 November 2007}}</ref>
  
However, others from within the accounting profession assert that the mark-to-market system in fact provides greater transparency and stability by applying similar values to similar assets, regardless of whether they were bought or created internally by a firm.<ref name="Newman">{{cite web|last1=Newman|first1=Jeremy|title=In Defense Of Mark-To-Market|url=https://www.forbes.com/2009/08/18/mark-to-market-banks-economy-opinions-contributors-accounting.html#1e64ec2c2414|website=Forbes|access-date=16 November 2017|language=en}}</ref> They contrast this with the alternate "[[mark-to-model]]" system—said to be riskier, less transparent, and results in incomparable and inconsistent reporting.<ref name="Newman" />

Others say mark-to-market provides the most practical choice when valuing most assets, if there is understanding of the long-term effects, and obligation to a global position.<ref name="Newman"/> They counter that the banking issues went beyond failures in accounting and into major liquidity concerns, and that the accounting profession, FASB, and SEC were not responsible for the banking crisis.<ref name="Newman"/>

A report from the [[Harvard Business Review]] agreed that the mark-to-market accounting is not the direct cause of the financial crisis, but the lack of knowledge related to accounting standards by investors fueled the fire. Most investors at the time assumed that all of banks' assets were appraised at market prices, and that the writing down of bonds would cause banks to violate regulatory capital requirements.<ref name="Pozen">{{cite journal|last1=Pozen|first1=Robert C.|title=Is It Fair to Blame Fair Value Accounting for the Financial Crisis?|url=https://hbr.org/2009/11/is-it-fair-to-blame-fair-value-accounting-for-the-financial-crisis|journal=Harvard Business Review|date=November 2009|access-date=16 November 2017}}</ref>

=== Materiality ===
The FASB issued a proposal regarding "the use of materiality by reporting entities" in an amendment of the definition of the legal concept of [[Materiality (auditing)|materiality]] in 2015, stating that "information would be considered material if it was likely to be seen by a reasonable person as significantly altering the total mix of facts about a company." This amendment raised concerns by auditors who believed leaving materiality as a legal concept would undermine judgments made by preparers and auditors to an attorney.<ref name="Morgenson">{{cite news|last1=Morgenson|first1=Gretchen|title=FASB Proposes to Curb What Companies Must Disclose|url=https://www.nytimes.com/2016/01/03/business/fasb-proposes-to-curb-what-companies-must-disclose.html|access-date=26 April 2018|work=The New York Times|date=2 January 2016}}</ref>

=== International comparability vs. convergence ===
Some industry professionals support development of a single, globally-shared set of accounting standards. [[Convergence of accounting standards|Convergence]] proponents assert that a single set of standards would make it easier and more cost-effective for large multi-national corporations to report using one set of financial reporting standards for all countries. They believe it would make financial statements more comparable to one another, improving overall transparency and understanding of a company's financial health.  Supporters also argue that a single set of standards would give investors access to crucial information more quickly and increase opportunities for international investments, resulting in economic growth.<ref name="Bader">{{cite journal|last1=Bader|first1=Keith|title=The International Accounting Debate: Options in Standardization|journal=Journal of International Business and Law|date=2009|volume=8|issue=1|url=https://scholarlycommons.law.hofstra.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1105&context=jibl|access-date=15 December 2017}}</ref><ref name="Pologeorgis">{{cite web|last1=Pologeorgis|first1=Nicolas|title=The Impact Of Combining The U.S. GAAP And IFRS|url=https://www.investopedia.com/articles/economics/12/impact-gaap-ifrs-convergence.asp|website=Investopedia|access-date=15 December 2017|date=16 October 2012}}</ref>

Other professionals, however, are opposed to wholesale convergence of a single set of international accounting standards.<ref name="Bader"/> Opponents share concerns that, due to different environmental influences around the world, such as differing stages of economic development and sources of funding, independent accounting standards are appropriate and necessary.<ref name="Choi">{{cite book|last1=Choi|first1=Frederick D.|title=Management Accounting|date=1981|page=29|chapter=A Cluster Approach to Harmonization}}</ref>

Convergence opponents have said that without vision and commitment to convergence, the standards wouldn't be effective unless they were enforced or provide significant benefits.<ref name="Bader"/>

Many{{which|date=April 2019}} U.S. accounting firms are opposed to convergence because of the familiarity of GAAP, the unfamiliarity with international accounting principles, and other countries' accounting systems. U.S. firms and other CPAs have been reluctant to adapt and learn a new accounting system, and believe that IFRS lacks guidance compared to the GAAP. CFOs are also against converging to one set of standards, because of the associated cost.<ref name="Pologeorgis"/>