Federal Reserve stresses the importance of good disclosure to investor confidence

Accounting and auditing scandals have led to an increased resolve on the part of governmental, regulatory and business to reinforce and improve standards-setting processes and disclosure practices by companies, according to the vice-chairman of the board of governors of the US Federal Reserve, Roger Ferguson.

Ferguson acknowledged that recent scandals in accounting have fuelled efforts to help restore investor confidence in US and European capital markets through legislative reforms that strengthen accounting standards, internal controls and transparency.

Ferguson’s address reflects a growing recognition that sound accounting policies and meaningful public disclosure by banking and other financial organisations and by non-banking companies can improve market discipline. The Federal Reserve accepts