SEC Announces 17-Member Financial Reporting Committee

The SEC has revealed that Morgan Stanley CFO David Sidwell, Microsoft Corp CFO Christopher Liddell and Jeffrey J. Diermeier, former global chief investment officer at UBS Global Asset Management, will be among the 17 financial industry experts charged with making the U.S. financial reporting system more useful for investors and less complex for U.S. companies.Sidwell, who spent nine years at PricewaterhouseCoopers and 20 years at JPMorgan Chase, will represent securities broker-dealers. Liddell will represent Fortune 500 technology companies and Diermeier, currently president and CEO of CFA Institute, Charlottesville, Va. will represent investment professionals.

The committee will meet for the first time on Thursday, August 2 at the SEC's Washington D.C. headquarters.

SEC chairman Christopher Cox said the committee was created because many investors have expressed concern, as financial reporting has become more complex, that it is often difficult to understand the financial reports of companies in which they invest.

"Likewise, companies have expressed concerns that it is difficult to ensure compliance with U.S. GAAP and SEC reporting rules when preparing financial reports," he said.

"In fact, during 2006, almost 10 percent of U.S. public companies had to restate prior financial reports due to the discovery of errors in those reports. Restatements are costly to companies, and undermine the confidence of investors in the financial reporting system," Cox added.

As part of its consideration of these areas, the advisory committee will look into ways to redesign the financial reporting system to take advantage of interactive data and the XBRL computer language for financial reporting.

Cox previously announced that the board will be headed by Robert Pozen, chairman of MFS Investment Mangement, which manages more than $200 billion in assets for more than five million investors worldwide. He will represent mutual funds.

Other committee members include Peter J. Wallison, Senior Fellow, American Enterprise Insitute for Public Policy Research, who will represent proponents of interactive data for financial reporting, and William H. Mann III, Senior Investment Analyst, Motley Fool, Alexandria, Va., who will represent individual investors.

Cox said, "I am pleased that this exceptionally distinguished group will advise the Commission and the nation on how our increasingly complex financial reporting system can be tamed and made more useful for everyone who relies on it. The committee members each represent key constituencies in our capital markets. I know we can count on them to thoroughly study these issues and recommend improvements that will keep America's financial reporting system as the gold standard for the world."

Further information about the advisory committee and its initial meeting is available on the SEC's Web site . Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio