Congress looks at accounting for business combinations

"Accounting standards are too important to be left to accountants." This statement, made a few years ago by a member of Congress, reflects the increasing interest of politicians in the work of the Financial Accounting Standards Board. Congressional hearings during the first half of 2000 provide interesting insights into the influence of the political process on private sector accounting standard setting. This Commentary summarizes statements made at these hearings by members of Congress and other participants. Some of these supported the FASB, but most did not. The FASB's responses to the issues raised are also described and the type of Congressional action that could result from these events is speculated on.