Rep. Richard H. Baker introduced a bill Thursday to let corporations challenge new accounting rules in court.
"Public companies will now be able to do what they currently cannot: have their complaints with the substance of a proposed accounting principle aired in the neutral forum of the federal court system," the Louisiana Republican said.
The Financial Accounting Fairness Act of 1998 also would require the Securities and Exchange Commission to approve formally all rules promulgated by the Financial Accounting Standards Board. The SEC would first have to publish the proposal and solicit comments.
To approve a rule, the SEC would have to determine that it is "consistent with the public interest and protection of investors." The agency also must consult banking regulators if the proposal would affect banks. Currently, the SEC does not have veto power over FASB rules. FASB is locked in a heated debate with the banking industry on a proposed rule to require that companies adjust their balance sheets to account for changes in the market value of derivatives.