On Wednesday 8, 2012, the House Committee on Ways and Means held a testimony on "The Interaction of Tax and Financial Accounting on Tax Reform." Here, Aparna Mathur contributes to their discussion.  

Does a pension plan that takes more investment risk become better funded? Both the current accounting standards and the proposed revisions answer yes, while economic theory and real-world financial markets say no. Until and unless this central question is answered correctly, both the size of pension liabilities and the steps that could address them will be misunderstood.

Few recognize just how troubled this government agency really is. When measured against the accounting system used by private mortgage insurers, the FHA is deeply insolvent, with a capital shortfall of tens of billions of dollars. If it were a private firm, state regulators would immediately shut it down. 

The banking industry suffered credit crises in the 1970s, 1980s, 1990s, and 2000s. An unavoidable conclusion is that its loan loss reserves were in all cases too small. 

Unless pension accounting rules are updated, taxpayers in New Jersey and around the country are in for a shock when the pension bill comes due.

Does the Sarbanes-Oxley Act violate the Constitution by vesting members of PCAOB with too much power?