Testifying before the U.S. House Energy and Commerce Committee, James Castellano, chairman of the American Institute of Certified Public Accountants, expressed the accounting profession’s support for reform of both the current accounting and auditing system and for enhancement and modernization of the broader financial reporting system.

Specifically, Castellano called for: a modernized financial reporting model to provide greater disclosure to investors about plans, opportunities, risks, uncertainties and the drivers of future success; more frequent reporting; FASB to revise current accounting rules for special purpose entities; a new auditing standard; requiring reports on internal control.

“We are deeply disturbed by the collapse of Enron. It has shaken the faith of America, and of the world, in our financial markets. The personal tragedy to Enron’s employees, retirees, and investors goes far beyond the dollars and jobs they have lost. The AICPA and its members are committed to taking the steps necessary to restore public confidence in the accounting profession and capital markets system. We will work actively with Congress to develop meaningful public policy reforms,” he said.

“Support for reform should not be limited to standard setters, regulators, and those whose oversight can take on formal qualities. All interested parties ‹ including the accounting profession, the investment community, registrants, creditors, and the financial industry — should be actively and constructively engaged. They should be united by the common goal of empowering investors.”