Problem
To mark the founding of the Toronto Stock Exchange (now the TSX) in 1861, the exchange is hosting an extravagant dinner inviting members of the Exchange-brokers and senior executives of asset management companies-as well as luminaries of the accounting profession and leading academics in finance and economics. You are an FCPA, and a member of the AcSB. After a fine dinner, you will be the main speaker. You have written a speech about recent developments in accounting standard setting and the AcSB's plans.
But there is a problem. Earlier today the Globe and Mail published a long interview between with the Globe's senior business journalist and Gerry Tremblay, the CEO of Lake Capital Management, Canada's largest asset management company. The journalist asked Tremblay for his views on fair value accounting. His reply was first to acknowledge that fair value certainly provided a "more accurate appraisal" of assets than did historical cost accounting and it increased "granularity and transparency." However, he went on, it forces everyone in financial markets-brokers, analysts, company managers, as well as investors-to focus almost exclusively on quarterly results. He concluded: "Few people look seriously at longer term developments. This is a major problem, and the accountants have to think about how this can be dealt with."
You cannot ignore Tremblay's remarks. You will devote some of your speech to challenging his specific comments and to defend fair value accounting.
Task
Write the addition to your speech that will counter Tremblay's comments and defend the AcSB's strategy on valuation and its long-term implications.