NEWS RELEASE 12/10/10
BLUE-RIBBON PANEL ADDRESSING STANDARDS FOR PRIVATE COMPANIES TO PROPOSE A
SEPARATE STANDARDS BOARD AND GAAP WITH EXCEPTIONS
Norwalk, CT,
December 10, 2010—The blue-ribbon panel addressing how U.S. accounting
standards can best meet the needs of users of private company financial
statements continued its discussion today of a potential new standard-setting
board for private companies, reaffirming a consensus view reached in October
that a separate private company standards board under the oversight of the
Financial Accounting Foundation (FAF) be created. The panel also continued
discussion of a new standard-setting model that follows generally accepted
accounting principles (GAAP) with exceptions for private companies.
The
panel addressed important related issues today such as how the new board would
work with the Financial Accounting Standards Board (FASB) throughout the
standard-setting process, what would be the new board’s mission and structure,
and how it would be potentially funded. The panel also began preparation of a
draft report containing its recommendations.
The panel is expected to
issue the report to the FAF Board of Trustees in early 2011 and then to the
public. After deliberation, the FAF Trustees’ resulting action plan is expected
to be subject to further input from constituents, including exposing the plan
for public comment prior to its being implemented.
The panel was formed
in 2009 by the American Institute of Certified Public Accountants (AICPA), the
FAF, and the National Association of State Boards of Accountancy (NASBA). The
members of the panel comprise a cross-section of financial reporting
constituencies, including lenders, investors, and owners as well as preparers,
auditors, and regulators. The panel is chaired by Rick Anderson, chairman of
Moss Adams LLP.
FAF President and CEO Teresa S. Polley said: “As part of
our Trustees’ strategic initiative, the FAF looks forward to further exploration
of the ideas and issues surfaced by the panel as we carefully deliberate
improvements in standard setting. We thank the panel for its work over these
many months, and its forthcoming proposal to the FAF will be an important
viewpoint on private company reporting issues the FAF will thoroughly
consider—along with an appropriate degree of public due process.”
Barry
Melancon, AICPA president and CEO said: “A significant majority of the
Blue-Ribbon Panel voted in October to recommend a new model of financial
reporting with a goal of more effective accounting standards for private
companies. The recommendation includes establishing a separate standard-setting
board for private companies under the Financial Accounting Foundation. Today’s
discussions in Norwalk focused on how that board would be structured and what
process works. We believe these proposed changes to the U.S. accounting system
would be widely supported by private company financial statement
constituents.”
Billy Atkinson, chairman of NASBA, said: “I am encouraged
by the changes now being made by the FAF and the FASB to address the foundation
of private entity accounting standards. This panel absolutely concluded there
were process problems needing resolution which have far-reaching public policy
implications. I would fully expect all constituents that are a part of this
debate will continue to gain new and valuable insights as the panel’s report and
conclusions are carefully considered in the months ahead.”
Media Contacts:
FAF - Neal E. McGarity,
203-956-5347, nemcgarity@f-a-f.org;
Christine L. Klimek, 203-956-3459, clklimek@f-a-f.org
AICPA
- William Roberts, 202-434-9266, wroberts@aicpa.org;
Media representatives are invited to visit the AICPA Online Media Center at http://www.aicpa.org/MediaCenter
NASBA
- Tom Kenny, 615-880-4237, tkenny@nasba.org
About
the Financial Accounting Foundation
The FAF is responsible for
the oversight, administration, and finances of both the Financial Accounting
Standards Board (www.fasb.org) and its
counterpart for state and local government, the Governmental Accounting
Standards Board (www.gasb.org).
The FASB
is the designated organization in the private sector for establishing standards
of financial accounting and reporting for non-governmental entities in the U.S.
The GASB establishes and improves financial accounting and reporting standards
for state and local governments. The FAF also is responsible for selecting the
members of both Boards and their respective Advisory Councils.
The FAF is
based in Norwalk, Conn.
About NASBA
The National
Association of State Boards of Accountancy (www.nasba.org) is the
membership organization for the 55 boards of accountancy (50 states, Puerto
Rico, Virgin Islands, Washington D.C., Guam, and Commonwealth of the Northern
Mariana Islands). NASBA’s mission is to enhance the effectiveness of state
boards of accountancy through programs which preserve the public trust and
confidence in the CPA license, ensure that the integrity, objectivity and
independence of CPAs are not compromised and foster compliance with ethical and
professional standards.
NASBA is headquartered in Nashville, TN and
maintains a northeast office in New York, NY.
About the
AICPA
The American Institute of Certified Public Accountants (www.aicpa.org) is the world’s
largest association representing the accounting profession, with nearly 370,000
members in 128 countries. AICPA members represent many areas of practice,
including business and industry, public practice, government, education, and
consulting; membership is also available to accounting students and CPA
candidates. The AICPA sets ethical standards for the profession and U.S.
auditing standards for audits of private companies, non-profit organizations,
federal, state and local governments. It develops and grades the Uniform CPA
Examination.
The AICPA maintains offices in New York, Washington, D.C.,
Durham, N.C., Ewing, N.J. and Lewisville, Tex.
Media representatives are
invited to visit the AICPA Press Center at www.aicpa.org/press.