A PETITION for deregulation of financial reporting

We petition the AICPA, SEC, and Congress of the USA to change the laws governing financial disclosure and reporting by publicly listed companies as follows:

A. REMOVAL OF BARRIERS ( ACCESS TO INFORMATION )

Insiders should not have better information than stockholders.

1. publicly listed companies having total capital and long term debt in excess of $100 Million should maintain interactive, electronic interfaces available to the public which provide all of today's required interim and annual financial statements, in both human-readable and machine-readable formats such as XBRL. 

2. the scope of information required should be expanded, to provide breakdowns of the numbers reported in audited financial statements, into reasonable and meaningful details. 

Each of those meaningful breakdowns should be further decomposed into individual transactions. These details should be made available in human-readable, interactive, drilldown interfaces with appropriate navigation and query tools, and through machine-readable formats.

3. the scope of information should, furthermore, be expanded to include *all* transaction data (including unaudited information) available in the accounting and information systems of the company more than 24 hours old. Transaction data includes orders, invoices, etc. together with any details of the surrounding contract or terms of trade necessary for understanding the transaction entry.

4. the level of detail to be provided in these new disclosures should be proportionate to the percentage of ownership plus long term debt held by the requestor of information, and should reach 100 percent of accounting detail for every holder of greater than 3% of the company or $1 million in equity+long term debt, whichever is less.

5. new standards should be established to provide reasonable but not excessive, reliability and accountability for this new, interim, unaudited accounting information.


B. DISCLOSURE OF CONTRACTS BY PUBLICLY LISTED COMPANIES

1. No sale, purchase or other transaction or contract involving any publicly listed company over $100 million in total capital + LT debt should be enforceable in the U.S. or its states, unless that contract is digitally signed by both parties to the contract and maintained for inspection by Owners within the disclosure system in (B) above.

This provision will basically push the country over to a standardized, electronic system of trade and settlement which will eliminate almost every category of bookkeeping, accounting, and payments work that follows after the decision is made to buy or sell. Everything after that point is deterministic, and will become quite automated very quickly after any standard is established. 

This provision itself, does not need to apply to contracts, trades etc below $1000 in order to trigger the establishment of robust security and metadata standards.



C. DEREGULATION OF THE ACCOUNTING INDUSTRY (ENDING OF PROTECTED MONOPOLY)

Government regulation of an information industry is futile.

The public accounting industry has continually grown less competitive, more inefficient, and more costly since the 1930s when mandatory audits began. The industry has effectively maintained barriers to entry or competition, and effectively dictated the kinds of information included in financial reports in a self-serving manner.

The entire regulatory burden and reporting standards applied to the largest companies (Big GAAP) is applied to every small CPA and business in the country, and enforced by state regulators. This is an economic injustice.

All of these phenomena are relics of an earlier age. Financial information is just like any other information, and government involvement in the information process is destructive and counterproductive.

1. Licensing requirements for CPAs should be removed. 

2. Owners and investors should freely choose, within a free market, their financial information provider based on objective quality, reputation, and the quality and methodology they apply to financial reports.

3. Definitions of terms used in financial statements (GAAP) should be determined solely by Owners and investors, as a matter of contract with their reporting providers or with officers and management. Government enforcement of GAAP terminology promulgated by private, unelected groups of CPAs, should end. Alternative definitions of GAAP should be encouraged, and Owners and investors should take responsibility for understanding them.


4. Software agents and robots should be granted equal rights to the provision of audit and accounting services as human CPAs. Discrimination against robots or software agent audits, failure of management to provide requested information or other obstruction of their function should be prohibited.


Todd Boyle CPA
23 jan 2002