With her appointment as Chairman of the Financial Accounting Standards Board (FASB), Leslie Seidman may be the most visible US advocate for a single set of quality global accounting standards. The EY alumna speaks frequently in Washington and around the world, exchanging views with standard-setters in many countries. Here, Seidman shares her perspective on the FASB’s work with the International Accounting Standards Board (IASB) to arrive at standards in those accounting areas of greatest interest to US practitioners.
As I travel around the world, I find a growing consensus around the importance of a global accounting language. During the 2008 financial crisis, the fact that US accounting standards were distinct from those of every other country caused confusion and contributed to a lack of investor confidence. At a moment of great financial upheaval, the business community understood the need for converged standards on key financial reporting issues.
I am very enthusiastic about the level of response we’ve received to our work with the IASB. We received hundreds, if not thousands, of comments on four very important proposals that we’ve been working on over the last few months. Since these four accounting areas — revenue recognition, lease accounting, fair value measurement and financial instruments — go to the core metrics of most companies, it is crucial that the FASB issue standards that companies can implement in an orderly way and that investors can understand.
The importance of outreach
In my travels, I am constantly reminded how critical it is to communicate effectively with people in order to understand their concerns. In each country I visit, I find distinct concerns and priorities around financial reporting. In the past, I may have preferred to avoid these national interests, but I have come to believe that the FASB needs to consider other countries’ perspectives on whatever standards we develop.
Private companies are a very important engine for building capital in the US and, as such, are a key constituency for the FASB. Yet private entities have unique needs. So in the last year or so, we have added staff and board members to support our outreach efforts. In addition, we are developing a framework around the requirements of private-company financial statements.
Similarly, we want to make sure that not-for-profit entities have sufficient guidance to report effectively on the financial conditions of their organizations. To this end, the FASB convened a not-for-profit advisory council last year because of concerns that the standards had not kept pace with developments in that sector. We are taking a fresh look at the basic accounting model for not-for-profit organizations.
In terms of outreach, technology has made a huge difference in the ability to communicate with our stakeholders. Webcasts, videoconferencing and podcasts are all essential tools in fulfilling the mission.
From liberal arts to accounting
I’m very fortunate that I discovered my professional niche early in my career. After graduating from Colgate University with a bachelor’s degree in English, I attended a program at NYU, cosponsored by EY, which enabled me to earn an MS in Accounting while working at the firm during busy season. It was a great way to transition from liberal arts to the accounting profession.
The EY alumni network is a lifetime commitment and a real gift.
When I assumed the leadership role at the FASB, I received wonderful messages of congratulations and support from mentors and colleagues throughout the network. I am also very fond of “Issues on my mind,” EY’s evening series of events for women executives. They are an excellent opportunity to meet outstanding women and keep up with developments. I always enjoy myself.
More about Leslie Seidman
- Founded and managed her own financial reporting consulting practice between her two stints at the FASB
- Authored Financial Instruments: A Comprehensive Guide to Accounting and Reporting, published by CCH, Inc.
- Lives in Westport, Connecticut, with her husband, Eric, and daughter, Medeline
- Involved in A Better Chance, a community organization that provides support to disadvantaged students with academic potential
The path to FASB
Leslie Seidman became a student of financial regulation early in her career while working at the firm. She took on an assignment in the US firm’s national office to review accounting in the financial statements of certain pension plans. She found the work “fascinating” and has followed her interests ever since. Seidman subsequently moved to JP Morgan (now JPMorgan Chase) as a vice president in the accounting policy department, where she was responsible for establishing accounting policies for then-new financial products, including securitizations and derivatives.
That experience served Seidman in good stead when she was appointed an industry fellow at the FASB in 1994. She stayed for five years, eventually rising to the position of Assistant Director of Research and Technical Activities. In this role, she had liaison responsibilities for the Securities and Exchange Commission and the regulators of financial institutions. She returned to the FASB in 2003.