The Financial Accounting Standards Board has published a proposal for public comment on a principles-based approach to accounting standard setting. The proposal discusses how that approach might improve the quality and transparency of financial reporting and affect development of future standards. FASB seeks comment on the proposal by Jan. 3, 2003, and will hold a public roundtable discussion on Dec. 16, 2002. The proposal is available through FASB’s Web site, at www.fasb.org.

Because adoption of a principles-based approach would require changes in the processes and behaviors of all participants in the U.S. financial accounting and reporting process, FASB indicates it needs more information before it determines the extent to which it should undertake initiatives to adopt that approach. Additionally, the recently enacted Sarbanes-Oxley Act requires the SEC to investigate the feasibility of implementing a more principles-based approach to accounting in this country and, therefore, FASB staff worked closely with the SEC staff in preparing this proposal.