Opening Statements of Committee Members

Opening Statement of Senator Debbie Stabenow (D-MI)

Hearing on "Accounting and Investor Protection Issues Raised by Enron and Other
Public Companies: International Accounting Standards and Necessary Reforms
to Improve Financial Reporting."

10:00 a.m., Thursday, February 14, 2002 - Dirksen 538

Thank you, Mr. Chairman. I'm glad to be back here for the second day in your series of hearings examining accounting and investor protection issues.

The hearing that was held on Tuesday, I believe, was extremely helpful as this Committee deliberates what reform measures it should take up.

Having all of the former S.E.C. Chairmen together was enormously insightful, and I know that the witnesses today - well-respected for their expertise - are also going to provide a wealth of insight as we grapple with these important issues.

On Tuesday we heard a great deal from the Chairman about what needed to be done in several areas including:

  • revisiting the current system of self-regulation,
  • establishing a financially independent oversight board,
  • ensuring that accounting firms sever inappropriate mixing of accounting with certain consulting services,
  • and, expediting and de-politicizing the development of accounting standards

    • - just to name a few.

    I know that the comments of the S.E.C. Chairmen will be instrumental in helping us to develop legislation to ensure that a debacle like Enron never happens again.

    Today's hearing will be another important piece of this careful deliberative process.

    As we begin to review accounting standards, in light of Enron and other failed companies, it is absolutely essential that we do so with a global perspective.

    As the Chairman and others have pointed out, the world's economy is increasingly linked by corporations seeking both capital and business in foreign companies.

    This raises important questions about which accounting principles should be applied to those companies.

    What makes this additionally challenging, however, is the fact that, as several of the SEC Chairmen pointed out, the other day, it is increasingly hard for the accounting industry to keep up with new financial instruments, novel business arrangements, and special accounting procedures.

    This challenge is further confounded because too often basic principles of accounting get lost in attempts to comply with, or in some cases unfortunately, in attempts to evade the rules.

    We need to put a stop to this rampant gamesmanship.

    Mr. Chairman, I look forward to hearing from our witnesses today as they testify on international accounting standards and I look forward to continuing to work with all of my colleagues in examining these important investor and consumer protection issues.

    Thank you.