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The Financial Crisis Advisory Group (FCAG), a high level group of recognised leaders with broad experience in international financial markets, published its recommendations related to accounting standard-setting activities and other changes to the international regulatory environment following the global financial crisis.
The report of the FCAG articulates four main principles and contains a series of recommendations to improve the functioning and effectiveness of global standard-setting. The chief areas addressed in the report are:
1. Effective financial reporting
2. Limitations of financial reporting
3. Convergence of accounting standards
4. Standard-setter's independence and accountability
Commenting on the report, Hans Hoogervorst, Co-Chairman of the FCAG said:
‘I urge policymakers around the world to study the report and to take note of its conclusions, especially the importance of broadly accepted accounting standards that are the result of a thorough due process. The report highlights the importance but also the limits of financial reporting. Accounting was not a root cause of the financial crisis, but it has an important role to play in its resolution.’