Submitted by Office of the Indiana Comptroller
Indiana State Comptroller Elise Nieshalla stands by the core of “the big three” Generally Accepted Accounting Principles (GAAP) of materiality, sincerity, and prudence, and says that incorporating the International Financial Reporting Standards Foundation (IFRSF) and the U.S. Securities and Exchange Commission’s (SEC) climate-disclosure rules into the Financial Accounting Standards Board (FASB) would be inconsistent with those long-established principles.
Nieshalla joined 25 fellow state financial officers in a letter to the FASB asking it to reject an effort that would be inconsistent and politicize core accounting standards.
“If the FASB adopts the climate-disclosure rules from the IFRSF or the SEC into its accounting standards, it compromises its credibility as an independent organization that sets standards solely based on its firm institutional standing on the big three principles in accounting,” Nieshalla said.
In addition, the SEC climate-disclosure rules are currently being challenged alleging the rules would cause irreparable harm and exceed the SEC’s authority. On March 15, 2024, the United States Fifth Circuit Court of Appeals granted a temporary stay of the rules.
“This proposal would undermine the standards adhered to in providing solid financial statements,” Nieshalla said. “This is an attempt to circumvent U.S. federal law to mandate environment related policies through financial reporting that is not prudent or appropriate.”
The State Comptroller’s Office has the responsibility and duty to provide accurate and reliable reporting of state funds using generally accepted accounting standards set by accounting boards like FASB.