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Accounting Reform
S. 2673, the Public Company Accounting Reform and Investor Protection Act of 2002, was introduced by Senator Sarbanes on June 25, 2002 and was passed by the Senate on July 15, 2002 by a vote of 97-0. As a member of the Banking Committee, I worked with my colleagues in crafting a responsible and credible bill to improve the quality and transparency of financial reporting and ensure the independence of public audits. S. 2673, as marked out of Committee and reconciled with the House, was signed into law by President Bush on July 30, 2002.
I believe the interests of America's investors were seriously compromised by the significant shortcomings in recent financial information provided to the public. By passing this legislation, the Senate has taken a very important step to address these deficiencies. This legislation contains numerous provisions which will help ensure that the accurate and timely information that investors need will be provided to the marketplace.
To deal with the audit failures and restatements which cost investors billions of dollars, this legislation creates a strong, independent oversight body that can 'audit the auditors' and punish those who break the rules. Additionally, this legislation eliminates the sticky entanglement between the people who write the accounting rules and the accountants that use them so that qualified, independent standard-setters can go about developing new rules in an unfettered environment. Ultimately, I believe this system will produce better, more timely rules which, when put in practice, will help provide investors a more accurate depiction of true economic conditions. Overall, I believe this legislation favors clarity over complexity, disclosure over dissembling, and fairness over favoritism.
Stock Options Expensing
The Financial Accounting Standards Board (FASB) is a private-sector organization that was created to establish and maintain efficient accounting standards. I am in favor of defining stock options as expenses; however, I strongly support the independence of the FASB.
As Chairman of the United States Senate Banking, Housing and Urban Affairs Committee, I would not support legislation hindering the ability of the FASB to set accounting standards relating to the issuance of stock options.
More information on Senator Shelby's activities regarding Banking, Housing and Urban Development:
Chemical Weapons Disposal at Anniston
Department of Homeland Security
Disability and Military Retirement Benefits