Public Accounting Positions, Ranked

We’ve been over this 1000 times but like a bad rash, the issue keeps coming back.
NYT has already accused politicians of meddling in the esoterica of accounting, though personally I think that accusation might have been expressed just a tad too late.
As I mentioned when the July article came out:
More, after the jump

Ex FASB chair and former KPMG partner Edward Trott got it right saying “The area for bank regulators to be involved with accounting standards setting is to help identify the financial information the banks need from others to make appropriate lending and investing decisions. In my experience, banks want current fair value information about assets that serve as collateral for loans. They do not want information about what assets cost two or three years ago.”

Exactly! So what’s the debate about?
Assets are not being valued rationally. If someone can explain the model to me, I would love to hear it.
Or as we now call it, “fuzzy math.”
I’ve never been a huge fan of math, probably a large part of why I ended up on the fringes of the accounting industry, we hardly use it. It’s the rules that are being perverted, not necessarily the numbers. That’s Trott’s point, and he’s not the only one who feels that way.
The problem is that companies (non-financials) need to navigate these waters that have been artificially stirred up to allow banks to appear healthier than they are. Companies are licking their wounds and selling off assets while banks are preening over their profitable quarters? That doesn’t make sense.
Accounting pressure is not new either:

What’s gone unnoticed is that in the late ’90s Summers did nothing to stop former Fed chair Alan Greenspan from pressuring US accounting rule makers to water down a proposed new derivatives accounting rule that may have helped stop the current crisis. Many business leaders had strongly opposed the new rule…In fact, in 1998, Summers testified in Congress against regulating the derivatives market.

The ongoing debate gets stranger. What is there to debate about? The pressure is there, minus the understanding of what occurs as a consequence of these actions. Somehow, the behavior continues and we’re still arguing over it.