From the President’s Desk
By Terri Polley, FAF President and Chief Executive Officer
Summer 2018

Standards That Work

Each year in May, our quarterly Trustee meeting brings the FAF Board of Trustees, FASB members, and GASB members together in Washington, DC to meet with elected officials and their staffs. At these meetings, we update our congressional stakeholders on the Boards’ activities and continue our dialogue about the benefits of high-quality accounting standards for U.S. capital markets.

It’s also when we unveil our annual report. During our most recent visit to the Hill, we presented lawmakers with copies of the 2017 FAF Annual Report, themed “Standards That Work.” The report gave us the opportunity to show them—and now you—everything the FASB and the GASB do to support the success of their standards so that they provide relevant information to investors, citizens, and other financial statement users.

The interactive digital annual report is available on our website.  Below is a reprint of the annual report letter from FAF Chairman Chuck Noski and me describing how the FAF supports the Boards that set standards that work:

Our collective mission is the establishment and improvement of high-quality financial accounting and reporting standards. A part of that mission is engaging with stakeholders to ensure that the standards work for investors, lenders, donors, citizens, academics, and other financial statement users that need an accurate picture of an organization’s financial condition and performance. The standards should also work for preparers, auditors, and other practitioners, so they can understand and apply the standards properly.

The standard-setting Boards—the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB)—are front and center in making standards work.

Meanwhile, in their stewardship role, the Financial Accounting Foundation (FAF) Board of Trustees makes sure the FASB and the GASB follow an independent and comprehensive standard-setting process. We also identify and appoint highly skilled people to those Boards.

In its support role, the FAF management team provides strategic counsel and ensures the Boards have the infrastructure and resources they need to successfully carry out their missions.
 
When the FAF Trustees exercises effective oversight, the standard-setting Boards are more successful.

In 2017, both FAF roles were critical to helping the Boards ensure that standards work.

When the FAF Board of Trustees exercises effective oversight, the standard-setting Boards are more successful. That oversight includes ensuring that the Boards’ standard-setting processes work effectively.

For example, in 2017, the Board of Trustees completed its review of the GASB scope of authority consultation process policy. Introduced in 2013, the policy set forth a process for ensuring the GASB was addressing issues within the scope of its standard-setting mission. The Board of Trustees’ review found the policy strikes the right balance by maintaining the independence of the GASB, while ensuring appropriate oversight by the Trustees.

During the Board of Trustees’ quarterly public meetings, FASB and GASB members discuss their activities and progress. These dialogues are important to the oversight process. The robust dialogues provide the FAF Trustees (and stakeholders who attend or watch the meetings online) fresh insights about Board strategy and direction. Several conversations this year centered on the FASB and GASB’s outreach to stakeholders. This provided the Board of Trustees with clear evidence that stakeholder outreach processes in place are working as intended.



In 2017, the Trustees also made high-quality appointments to the FASB, the GASB, and their respective advisory councils. Part of making standards work is understanding that the Boards don’t just need skilled standard setters, they need skilled communicators. We are confident that the appointees have demonstrated leadership in communication and stakeholder engagement—and a commitment to making standards work.
 
Finally, the Trustees worked hard to promote and protect the independence of the Boards and the standard-setting process. The Trustees make sure that the organizations reach out on an ongoing basis to elected and political leaders to educate them about our ongoing activities and discuss how the Boards can better serve investors and other users of financial statements. In 2017, the Trustees continued the tradition of meeting with key stakeholders on Capitol Hill, in the Administration, and at relevant industry groups.

Our 2017 brand reputation study provided us with valuable insights about stakeholder perceptions of the FASB and GASB’s standard-setting processes. Early in the year, we surveyed thousands of our stakeholders about their perceptions of FAF, FASB, and GASB performance, and how we can improve. More than 1,600 diverse stakeholders responded. The FAF, FASB, and GASB learned much from the study, and the data immediately helped us further improve the way (and what) we are communicating with stakeholders.
 
The FAF management team built a customer relationship management platform that helps the Boards better engage with their stakeholders.

On the infrastructure front, the FAF management team continued to make significant progress on a multiyear information technology (IT) transformation project. This initiative is creating the technology tools the standard-setting Boards need to carry out their responsibilities more effectively and efficiently.

In 2017, the FAF management team built a customer relationship management platform that helps the Boards better engage with their stakeholders. With FASB and GASB members and staff delivering hundreds of speeches around the country each year, the speaker request portal was also upgraded. Now available through the FASB, GASB, and FAF websites, the portal guides stakeholders, step by step, through the process of requesting FASB, GASB, and FAF speakers.
 
We’re all committed to the development of high-quality accounting standards and engaging with stakeholders to ensure that the standards work.

Lastly, the FAF management team is assessing our publishing and content fulfillment and distribution platforms. Given the age of our current content platform and the changing trends in publishing, this assessment will ensure that our stakeholders continue to get what they need from the FASB and the GASB in an effective, timely, and cost-efficient manner.

Although the FAF, FASB, and GASB each have different roles, we’re all committed to the development of high-quality accounting standards and engaging with stakeholders to ensure that the standards work. On behalf of the FAF, thank you for your interest and involvement in our mission.

Sincerely,



Charles H. Noski
Chairman of the Board of Trustees

 

Teresa S. Polley
President and CEO