Good news: We finally know what caused the financial crisis.

It was the accounting rules and their annoying, inconvenient habit of insisting upon accuracy and transparency.

I'm being facetious, of course. But that's what lawmakers would have you believe, judging from the recaps of testimony from a March 12 House Financial Services subcommittee hearing.

The day started out tamely enough. In quick succession, we saw statements from AICPA President Barry Melancon, Financial Accounting Standards Board Chair Robert Herz and Currency Deputy Comptroller Kevin Bailey in which each voiced support for fair-value (or mark-to-market) accounting, which requires companies to value their assets at current market prices.

Logical enough.

Then the hearings started, and it quickly became apparent that lawmakers — convinced that banks will suffer steep losses if forced to comply with mark-to-market's rules — were seeking fundamental changes to those rules. Members of the subcommittee grilled Herz and insisted that the FASB compile new guidelines for fair-value accounting ASAP. Herz told the politicians he and his staff could finalize the new guidelines within three weeks, and the SEC chimed in by saying it “stands fully ready to assist.”

There are plenty of areas of the economy that are screaming for more regulation these days, but in my opinion, fair-value accounting isn't one of them. Still, we've got politicians like Rep. Spencer Bachus of Alabama saying things like this: “Action must be taken immediately to help bring certainty to the markets.”

Certainty to the markets? If we start messing with these accounting rules, we'll have nothing but uncertainty. The market's telling us one thing, but the people who hold these assets are telling us another. Who are we to believe? Which is the true value? You call that certainty?

I call it the two-cows argument for suspending mark-to-market, which comes to us from John Carney of ClusterStock (and, later, from Jack Ciesielski and his Accounting Observer blog). It's a tongue-in-cheek look at the situation, but there's more than a little truth in there, too, if you ask me.

What do you think? Will altering the accounting rules clarify or confuse the situation?