Accounting firm Clifton Gunderson said Tuesday it is intensifying its efforts to persuade the Financial Accounting Foundation to set up an independent board to set accounting standards for privately held companies.

Kris McMasters

The FAF has proposed establishing a Private Company Standards Improvement Council that would be allowed to propose and vote on modifications in U.S. GAAP for private companies that would then be ratified by the Financial Accounting Standards Board (see FAF Proposes New Council for Private Company Accounting Standards).

However, the American Institute of CPAs said the proposal does not go far enough in addressing the concerns of a Blue Ribbon Panel on Standard Setting for Private Companies, which issued a report recommending that a separate board for private standards be set up, under the oversight of FASB’s parent organization, the FAF. At its Fall Meeting of Council in October, the AICPA urged CPAs and state CPA societies to continue to write comment letters to the FAF supporting a separate board (see AICPA Issues Ultimatum on Private Company Accounting Standards).

Clifton Gunderson, which recently announced a merger with LarsonAllen early next year, said it is issuing a call to action to address private company standards (see Clifton Gunderson and LarsonAllen to Merge). Clifton Gunderson CEO Kris McMasters is leading the efforts, which includes participation from the firm’s nearly 700 CPAs in a campaign focusing on the needs of privately held businesses and their owners.

“FAF has really missed the mark when it comes to the needs of privately held company constituency,” McMasters said in a statement. “While FAF’s proposal recognizes the need for modifications to accounting standards, its methods for making these changes still follows a path that has failed for over 40 years. Unless there is a separate board, the concerns of users and preparers of privately held companies’ financial statements will not be fully met. As a leader within the accounting profession and as a firm that champions the needs of private companies, we need to ensure the voices of private companies are heard. The time to act is now.”

The firm is participating in the AICPA’s letter-writing campaign urging CPAs and private-company clients to express their disappointment directly to FAF regarding its failure to call for an independent board. The firm is using the sample letter-writing template provided by the AICPA, and offering other information to help clients and constituents understand the issue through its Web site, www.cliftoncpa.com. The comment deadline on the FAF proposal is Jan. 14, 2012.