Methodology Authority

Notes

The category is familiar across mature regulatory ecosystems. The Financial Accounting Standards Board publishes the Codification under which U.S. financial reporting is rendered; the International Accounting Standards Board publishes the standards under which non-U.S. reporting is rendered; the Public Company Accounting Oversight Board publishes the auditing standards under which those reports are examined and inspects the firms that apply them.¹ The Nationally Recognized Statistical Rating Organization framework administered by the SEC requires that NRSROs determine ratings according to board-approved methodologies that are publicly available, and that those methodologies be inspected for consistent application.² The ISO/IEC 17065 framework prescribes the requirements for any body whose business is certifying products, processes, or services against published specifications.³

What unites these institutions is the separation of methodology from application. The authority that publishes the methodology is institutionally distinct from the parties whose work it governs and from the regulators whose enforcement it informs. The methodology is the institution's product. Its consistency, its transparency, and its endurance across subjects and time are the institution's standing.

The category exists in U.S. financial reporting (FASB), in international financial reporting (IASB), in audit (PCAOB), in credit ratings (NRSROs), in conformity assessment (ISO/IEC 17065 bodies), and in payment systems standards (PFMI under CPMI-IOSCO). It does not yet exist for the Operational Suitability of tokenized settlement infrastructure. That absence is what defines the Assurance Gap.