Larry Medina wrote:
>"When a highly prescriptive standards setter is coupled with a rigorous
enforcement process used by a government regulator to secure compliance
with
accounting standards, especially in a confrontational society such as
the
United States, companies and even branches of government will lobby the
standards setter not to approve standards that interfere with their
business
plans and strategies. This is what has happened increasingly in the
United
States since the 1970s, and there is no sign that, on sensitive and
controversial issues, it will diminish in intensity or frequency."

>Curious what others think about this opinion.

Larry, this is essentially what happened recently on easing rules
regarding "mark to market" accounting:

http://www.reuters.com/article/newsOne/idUSN0235590020090402

BTW, you're on a roll today - great postings!

Dwight Wallis, CRM
Records Administrator
Multnomah County Fleet, Records, Electronics, Distribution and Stores
(FREDS)
1620 S.E. 190th Avenue
Portland, OR 97233
Phone: (503)988-3741
Fax: (503)988-3754
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-----Original Message-----
From: Records Management Program [mailto:[log in to unmask]] On
Behalf Of Larry Medina
Sent: Tuesday, June 02, 2009 3:42 PM
To: [log in to unmask]
Subject: Re: GAAP and GARP

>I always had the sense that GARP was done in partial imitation of GAAP
--
at least in the hope that it could be a widely recognized as the GAAP.
I do
not know that this is accurate but would be interested in additional
background.  I am somewhat curious as to the GARP's purpose and how its
authors anticipate that it might be used.
>
>It is interesting to note that key stakeholders have struggled over
this
for many years.  I thought the two part article from the NY State
Society of
CPA's was interesting enough to forward to the list.
>

David-

When this concept was first floated by the ARMA SDC when I was the
Chair,
that is how it was proposed, as a product similar to GAAP.  There was
some
discussion about it and the final decision was there wasn't sufficient
base
work to support such a set of practices within the field of RIM, simply
because things are too broadly defined.  

There are many 'practices" within various industry segments that don't
fit
others, and in many cases couldn't even be adapted to because they don't
serve a purpose across industries.  Same is true of public as opposed to
private entities... and even within those there are differing practices,
policies, processes, requirements, etc.

The articles you provided links to show the arduous process the
accounting
industry went through over a period of 70 years, and how the committees
that
developed the initial practices were comprised of a wide range of
Certified
Public Accountants, and members of the AICPA, and how there was
oversight by
federal entities, followed by continual peer review, endless revisions,
and
in some cases even legislation that resulted in what were "generally
accepted principles", that are still being tested and revised.  (Also,
there
is a State Licensing Board that approves individuals to become CPAs in
all
but 5 States in the US, and the policies for this licensing and
designation
date back to the late 1800s.)

This is in a large part why I was questioning the background of these
published principles and seeking further information as to their
basis...
after many years in this field, I'm not convinced there truly can be a
set
of principles issued that are able to satisfy the requirements of this
field... and especially not ones that are issued in this hasty of a
manner.

I'd also like to draw attention to the conclusion of the second part of
the
article, which I found quite interesting:

"When a highly prescriptive standards setter is coupled with a rigorous
enforcement process used by a government regulator to secure compliance
with
accounting standards, especially in a confrontational society such as
the
United States, companies and even branches of government will lobby the
standards setter not to approve standards that interfere with their
business
plans and strategies. This is what has happened increasingly in the
United
States since the 1970s, and there is no sign that, on sensitive and
controversial issues, it will diminish in intensity or frequency."

Curious what others think about this opinion.

Larry
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