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Promoting Transparency in Financial Reporting Act of 2007

August 4, 2009
Floor Statement
Rep. Maxine Waters [D-CA]: Mr. Speaker, I rise in support of H.R. 755, Promoting Transparency in Financial Reporting Act of 2007.

H.R. 755 is a simple, but important measure. It requires the Securities and
Exchange Commission, the Financial Accounting Standards Board, and the Public Company Accounting Board to provide annual testimony by their respective chairpersons or designees of the chairperson starting next year and for five subsequent years to the Committee on Financial Services on their efforts to reduce the complexity of financial reporting to provide a more accurate and clear financial information to investors, including:

• Reassessing complex and outdated accounting standards;
• improving the understandability, consistency, and overall usability of the existing accounting and auditing literature;
• developing principles-based accounting standards;
• encouraging the use and acceptance of interactive data; and promoting disclosures in plain English.

In view of the different accounting standards being used in the private sector and government, it is clear that we need to have information that is reliable and credible. Financial information that does not meet rigorous and acceptable standards sends the wrong signals to investors as well as to the public about the real the financial condition of a business.

As we have witnessed over the past several years, the quality of financial information can make the difference between the true value of a company and what the public perceives to be its condition. H.R. 755 is an important first step towards making sure that the information being reported to investors and to the public is believable. As such, I ask my colleagues to join me in supporting this bill.

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