Approval of a resolution to support the creation of a GAAP model for private companies and a separate standards board, a revamp of the CPA Vision project and the election of the new 2010-2011 chairman highlighted the Fall Meeting of Council of the American Institute of CPAs, here.
At the meeting's spirited opening session, members of the Blue Ribbon Panel, whose task is to discuss standard-setting for private companies, held a panel discussion updating its work so far. It would later set the stage for a resolution that Council ultimately approved "that the CPA profession stands ready to help implement a differential GAAP model for private companies, as determined by a separate private company accounting standards board."
Outgoing AICPA chair Robert Harris moderated the panel, which included AICPA president and chief executive Barry Melancon; Billy Atkinson, the chairman of the National Association of State Boards of Accountancy; and Judy O'Dell, chair of the FASB Private Company Financial Reporting Committee.
In October, a majority of the panel voted in favor of establishing a separate standard-setting board for private company accounting. This new board would not set up a whole new set of accounting standards, but instead come at the project with an "on-off switch" mentality - keeping the Financial Accounting Standards Board standards, but tweaking them as necessary for private companies.
At a meeting scheduled for December 10, the panel is slated to discuss the draft report containing its recommendations. It is then expected to issue the report to the Board of Trustees of the Financial Accounting Foundation in January 2011, and then to the public.
"GAAP is broken as it relates to private companies and private entities," Atkinson told the roughly 400 attendees. "That was clearly the viewpoint that came across in the first four meetings. The problem, for a majority of us, is more with FASB. They have seemingly forgotten that their goal is to provide useful accounting standards. Can we change the complexity of the existing FASB or do we create a new one, and what are the risks?"
"We are closer than ever before to having differential standards for private companies and a different board to set those standards, but it will take state societies to educate CPAs to go back into those communities and talk to their clients," Melancon said. "It's going to really have to start out with the people in this room to get firms involved, get clients involved, get bankers involved. Between now and the time we are together again, there are going to be a lot of things that are going to be evolved in this area."
STATE OF THE PROFESSION
Looking into the future and renewing the AICPA's vision shared center stage at the Fall Council, and that goal resonated throughout Melancon's traditional "State of the Profession" presentation.
Melancon touched upon a variety of profession-centric issues, including economic uncertainties such as the Dodd-Frank Act, health care, a threat of deflation, interest rate policy, high foreclosure rates in real estate, and the expiring Bush tax cuts.
He pointed out that the economic downturn has brought some positive outcomes - an increase in sole proprietorship, growing volunteerism, a do-it-yourself mentality and an emergence of creative solutions to everyday problems. Financial literacy has improved, as well as the public knowledge of the trusted advisor role for CPAs.
As tax preparer registration looms closer, Melancon recommended that the IRS's planned preparer testing should be delayed. "There are certainly parts inside the IRS that clearly see this as creating a new profession," he said. "This needs to be on your agendas, part of your education. It's not so easy for us to be successful on this issue because there is a lot of momentum."
HONING THE VISION
Next year will be a critical year for International Financial Reporting Standards and there has been improvement - albeit small - among AICPA members in learning more about what's to come with regard to convergence. In October 2008, 26 percent of the institute's membership reported having some knowledge in the subject. In September 2010, that number jumped to 33 percent.
Melancon also told attendees that as more young people enter the profession, it is essential that employers "get hooks in them and nurture them. It is important we are in tune to the feelings they are having. Take that back home with you."
The CPA Vision Project, which will take the institute into the next decade, is well under way. During the meeting, Council members heard from futurists to help them get a macro understanding of the issues that are shaping the accounting profession.
One of the charges over the next year for new AICPA chairman Paul Stahlin, who serves as regional president of Skylands Community Bank in Chester, N.J., will be to lead the Vision Project. The initiative, which began in 1996, concludes in 2011. "We as CPAs have the unique ability to make sense of a constantly changing, complex world," Stahlin said. "Employers, our clients and our country turn to us to make sense of the most complex developments in business and regulation."
At the confab, Council members were asked to answer four questions in groups regarding technological, political, regulatory, social and economic trends. The answers were compiled and will be part of updating the institute's strategic plan.
"That process is so good, they should do more of it," said William Finnecy, a partner at Malin, Bergquist & Co. in Pittsburgh, adding that his colleagues discussed how CPAs need to get more involved in the regulatory process. "We as CPAs have to do a better job giving money so our voices are heard. We need to get in the game and we need more CPA elected officials - whether in state or local government."
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access