10 Stories That Shaped 2011
Our editors' picks for the 10 stories that shaped accounting in 2011.
At the very start of 2011, the Blue Ribbon Panel on Standard-Setting for Private Companies officially recommended that the Financial Accounting Foundation establish a separate board to handle accounting for non-public entities. The panel, which was created in 2009 by the FAF, the AICPA and NASBA, and chaired by Moss Adams chief Rick Anderson (pictured), thus raised hopes that the age-old "Big GAAP-Little GAAP" controversy might be near its end.
After studying the Blue Ribbon Panel's report and consulting with its many constituencies, the FAF decided in October against proposing an independent board, opting instead to suggest a council that could identify, propose and vote on possible improvements to GAAP for private companies, but still require ratification by FASB. One of the reasons for that, according to FAF president Teresa Polley (pictured), was specifically to avoid the creation of a separate "Little GAAP."
From the moment the Blue Ribbon Panel released its recommendations, the institute and its chief, Barry Melancon (pictured), made it abundantly clear that they wanted the FAF to establish a separate board - speaking frequently on the subject and even going so far as to arrange a letter-writing campaign. And when the FAF wouldn't go that far, the AICPA loudly voiced its displeasure, and voted to give itself the power to set standards for private companies.
Despite some snags in the registration process, the IRS's new paid preparer regime rolled out fairly smoothly in 2011, with over 700,000 preparers registering - though after tax season the IRS did have to send letters to around 100,000 who failed to follow the rules. Later in the year it started releasing rules on CPE, the new competency exam, and who, exactly, would need to be fingerprinted ... .
In a speech in April, IRS Commissioner Doug Shulman (pictured) described a future tax prep system where the IRS would be able to match data from information returns to taxpayers' tax returns, and even in some cases pre-populate them. By the end of the year, the service was planning public meetings on its proposed "real-time tax system."
Not since 1998 have we seen so many mergers between accounting firms, or such big ones. Besides a plethora of small and midsized mergers, 2011 saw such enormous hookups as Dixon Hughes with Goodman, Clifton Gunderson with LarsonAllen, and Grant Thornton with CCR. You'd think there wouldn't be any firms left to merge - but experts are already predicting that 2012 will break records.
After keeping accountants, corporate management and everyone else in the world on tenterhooks for what feels like years, the SEC announced in December that it still wasn't ready to decide on incorporating IFRS into the U.S. financial reporting system. They need "a few additional months," according to Chief Accountant James Kroeker (pictured).
Prior to his installation as chairman of the Public Company Accounting Oversight Board in January 2011, most in the profession knew Doty mainly from his role in defending its constitutionality. Now they probably know him for suggesting wide-ranging changes to the auditor's reporting model, seriously contemplating mandatory auditor rotation, and questioning the inherent conflict of interest in the auditor's position.
While FASB and the IASB keep plugging away at converging their standards, their schedule slipped early in the year, and by the end of 2011, both FASB Chair Leslie Seidman and the new IASB Chair Hans Hoogervorst (who took over his board in July; pictured) were pushing for IFRS endorsement in the U.S.
It only took a decade, but accountants as a group are at last beginning to recognize the value in cloud, Software-as-a-Service and similar Web-based technologies. Improvements in the technology, years of patient education by tech experts, and, it must be noted, advocacy by the AICPA and CPA2Biz, have soothed fears about this new frontier in technology, and greatly spurred adoption.