Audit Group Seeks to Speed Rule Changes

The group that sets U.S. accounting rules said Thursday it wants to shrink its board and make it easier for changes to be passed.

The Financial Accounting Standards Board, criticized for being slow to change rules that allowed Enron Corp. to hide debt in off-balance-sheet partnerships, proposed dropping to five members from seven and narrowing the vote needed to pass rule changes to three to two from five to two.

“They’ve decided to put their foot on the accelerator,” said Dennis Beresford, a University of Georgia accounting professor. “In the past, the board has taken too long to get things done.”

FASB also proposed shortening the public comment period on rule changes. That period now can run up to 90 days. The board asked for comment on the changes to its own structure within 30 days.

But some experts said FASB still faced the threat of excessive outside interference. “You can tinker with the voting, you can tinker with the number of members on the board, but if you still get political interference, you’re still going to have a resistance to change,” said William Shenkir, former dean of the University of Virginia’s McIntire School of Commerce.