The Financial Accounting Standards Board (FASB) has built a wide advisory network to pressure-test new standards before they’re finalized: investors, auditors, corporate controllers, private-company executives, nonprofits and academics. On paper, it’s a built-in early-warning system.
Off paper, some participants say it can feel like an ecosystem that keeps hearing from the same kinds of people—highly technical, highly experienced, and sometimes unusually familiar with the FASB itself.
“There is the appearance to some that the FASB tends to recycle members through various advisory groups,” one senior accountant, speaking on condition of anonymity, said. The concern isn’t competence, the accountant emphasized—it’s range. “When the board keeps recycling the same folks through various committees, or you include past FASB staff on such committees, you’re limiting the diversity of thought.”
A FASB spokesperson declined to comment on February 17, 2026.
A Broad Web—Plus a Recurring Cast
Still, the board’s advisory structure is extensive. The Financial Accounting Standards Advisory Council (formed in 1973) is the big-tent venue for agenda-setting and process feedback. The Private Company Council (PCC) is designed to challenge public-company complexity that doesn’t translate to private firms. The Investor Advisory Committee exists to keep the focus on what’s decision-useful for markets. There are sector and market-specific groups, including the Not-for-Profit Advisory Committee and the Public Markets Advisory Committee (renamed in 2025 from the Small Business Advisory Committee). The Academic Resource Group is meant to bring research to the table, and the Emerging Issues Task Force (created in 1984) is the rapid-response mechanism for application issues.
The critique from some observers is less about whether these groups exist than about who consistently occupies the seats.
“Another challenge is that with the exception of the PCC, the Big Four is always represented on practically every committee,” the accountant said. “This practice tends to result in having four like-minded individuals on committees, representing a substantial block of the voices on that advisory group.”
The accountant also flagged a similar dynamic with overlapping backgrounds: “There also tends to be a fair number of former SEC staff that serve in advisory roles. I’m again not sure that having folks with overlapping backgrounds help with the diversity of thought.”
Outreach happens. Then what?
FASB staff do extensive outreach—often years of it—before major standards are finalized. But people who’ve been on the receiving end say the most frustrating part can be what comes after.
“I’ve been part of that process on a few occasions,” the accountant said. “The issue I sometimes see is that the folks with whom the staff speak raise really good points about implementation challenges and hidden costs. But the staff decides, for whatever reason, to ignore those comments.”
From the outside, it can be difficult to know whether feedback was rejected, misunderstood, scoped out, or outweighed by other priorities. “It’s hard to know from the perspective of an outreach participant how the staff disposes of outreach feedback—we give the comments to the staff and then can only look to the final standard to see if they were addressed,” the accountant said. “If not, we’re never quite sure why.”
The accountant floated a possibility that’s hard to prove but speaks to the perception problem: staff timelines and turnover. “Maybe it could be that the staff are rotating back to their sponsor firms, and wish to wrap up a project before departing (‘pesky’ outreach comments might get in the way of achieving that timeline),” the accountant said—adding that there could be “other reasons entirely.”
That uncertainty matters because the whole premise of an advisory network is not just hearing concerns—it’s showing that concerns are weighed, tested, and either addressed or consciously rejected.
The Hard Part Isn’t the Accounting—it’s the Build
Even when a new standard is conceptually clear, implementation can hinge on things that don’t fit neatly in an accounting memo: data that doesn’t exist in a usable form, controls that don’t map to the new process, systems that were never designed to capture the required fields, and the plain fact that contracts live in too many places.
That’s where critics say committee composition becomes practical, not philosophical. Senior technical experts can debate recognition and measurement for hours. But the most valuable early warning can be operational: we can’t find the contracts, we can’t extract terms at scale, we can’t make this auditable without retooling workflows.
And the people most likely to spot that early—systems owners, data governance leaders, control operators—aren’t always the ones who show up in standard-setting rooms.
Leases: a Case Study in Who Gets Believed
FASB’s post-implementation review (PIR) of the leases standard (ASC 842) describes years of stakeholder engagement and still acknowledges a key miss: during deliberations, the Board did not fully weigh implementation costs in part because many preparers said they expected to rely on legacy systems and processes—suggesting the incremental effort would not be significant.
For many companies, that expectation didn’t hold. A major driver of cost wasn’t interpreting the guidance; it was building the operational foundation: identifying the lease population, extracting terms at scale, and bringing work that used to live in disclosures into systems, records, and internal controls.
But at least one user of financial statements—who also spoke on condition of anonymity because of the sensitivity of the topic—sees the “we underestimated the costs” narrative very differently.
“Regarding the PIR on lease accounting and other similar issues, I have always taken claims of implementation costs by the preparer/auditor community with a huge grain of salt,” the user said. “The arguments are almost always entirely predictable because I think they tend to work to the advantage of those constituents who place a higher priority on their own costs, the status quo, and their legal risks than they do on the legitimate needs of investors and the capital markets.”
The user went further, arguing that the public record around leases made the later surprise hard to accept. “I’m a bit shocked that someone could claim the implementation costs were underestimated,” the user said. “That seems to me to be gaslighting or revisionist history.” The user recalled prominent warnings early in the project that lease accounting changes would be catastrophic—warnings they said never materialized. “I don’t think any of those hyperbolic predictions actually came to pass,” the user said.
In the user’s view, the core problem is structural: costs are loud and countable; benefits are quiet and diffuse. “The FASB suffers from the imbalance between the very tangible, loud, and hypothetical costs that may be borne by preparers and auditors and the much more quiet and harder-to-measure benefits to investors,” the user said.
That imbalance can shape outcomes long before any standard is issued. “Time after time, very promising changes that would likely improve the information available to financial statement users fails to survive the deliberation process because the FASB hears WAY much more information from the opponents of change,” the user said.
On leases specifically, the user argued that recognition did what it was supposed to do: reduce structuring opportunities and improve comparability. “The benefits to readers of financial statements from seeing recognized…assets on the balance sheet related to leases regardless of their…structuring must be enormous,” the user said—while acknowledging that benefit is “nearly impossible to quantify.”
Early Warning System—or a Way to Claim Consensus?
Both sources—coming from different sides of the reporting equation—land on the same unresolved question: not whether advisory groups exist, but whether they change the outcome.
“The advisory boards are a potential way to address this problem, and I’d like to think that they can work and have been working,” the user said. “Unfortunately, I still think their ‘voices’ are much smaller than those of the large preparers, auditors, and their advocacy groups who devote substantial resources to lobbying the FASB, attending every meeting, etc.”
In that framing, the advisory system can do two things at once. “I think the advisory boards may do both—and more,” the user said. “I think they can be an early-warning system for sure. However, we cannot observe whether their early warnings are actually heeded.”
And that’s where the “echo chamber” risk creeps in. “They also can provide a false sense of consensus,” the user said, “and there’s a risk that the FASB can use them to claim they listen to a broad range of informed constituents while simultaneously discounting or under-weighting their advice relative to the more powerful preparer/auditor constituents.”
What Would Make the Network Feel Less Like a Loop?
The fix, as described by people who’ve watched and participated, isn’t necessarily more outreach. It’s making outreach easier to trust.
That can mean widening the mix beyond the usual technical profiles—pulling in systems, controls, and data leaders who can stress-test whether a standard is operationally buildable. It can also mean tightening the feedback loop so participants can see, in plain language, what the staff concluded from outreach and why—especially when the staff decides not to act on a warning.
Because right now, the most common frustration isn’t that FASB doesn’t ask. It’s that, for outsiders, it can be hard to tell what happens after they answer.
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