Investor advocate groups are renewing their appeal to the new administration and to Congress to resist the temptation to tinker with accounting rules as a solution to the credit crisis and its effects on the economy.

The Center for Audit Quality, CFA Institute, Consumer Federation of America, and the Council of Institutional Investors teamed up to pen a letter to Timothy Geithner, secretary of the U.S. Treasury; Ben Bernanke, chairman of the Federal Reserve Board; and Mary Schapiro, chairman of the Securities and Exchange Commission. The advocacy groups implored the regulatory leaders to steer clear of accounting rules as they search for ways to solve regulatory capital problems for lending institutions.

“We should not confuse the independent private sector Financial Accounting Standards Board’s role to develop and improve financial accounting and reporting standards with the role and responsibilities of the regulatory bodies charged with the oversight of the safety and soundness of financial institutions,” the groups wrote. “We do not believe the FASB is the body to effect capital adequacy goals for the financial institution sector.”

The groups warned that accounting rule accommodations designed to get around fair-value measurements of toxic assets “would raise suspicions that the rules were changed in order to falsely inflate asset values,” the groups wrote. “We must avoid a further crisis of investor confidence in our government and the regulatory bodies overseeing those institutions.”

The groups sent a similar appeal to key Congressional leaders, applauding Treasury efforts to find fair, realistic values for troubled assets but asserting it should not be done in a way that compromises fair-value accounting information that investors value. Collectively, the groups appealing to the administration and Congress represent public company auditors, financial analysts, investors, and consumers.

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