Washington (April 28, 2003) - The American Institute of CPAs kicked off its national Spring Council meeting Sunday by acknowledging there will be different sets of audit standards for public and privately-owned businesses and embracing its diminished role as the standard setter for the latter.
"One set of standards no longer looks operable," said AICPA chairman William F. Ezzell in the conference's opening session Sunday. "We have to step forward in our role in setting standards for non-issuers (privately-held companies that do not issue public stock).
Ezzell essentially pronounced as dead any thought that audit standards for privately-held companies would be overseen by the Public Company Accounting Oversight Board. The AICPA had been the standard setter for both private and public companies until Sarbanes-Oxley legislation, approved by Congress last year, created the PCAOB to regulate public company audits.
Issues in setting standards for just private companies was among the topics that Council members were slated to discuss last night in a series of break-out sessions. "As a group we have to discuss how we will do this and the risks involved," said Lynn Drake, communications director of the institute's Washington office,
AICPA president Barry Melancon said that the many issues to be considered include how to work with other industries and dealing with standards that may be workable for public companies, but not for private ones. He notedthat private companies represent about half of the U.S. economy and that less than 1,000 of the nation's 45,000 CPA firms handle public company audits.
In the remainder of his opening remarks, Ezzell described how the AICPA has responded to Sarbanes-Oxley and other new challenges in the past year and previewed some of the meeting agenda for Monday and Tuesday. The most controversial item is a report by the institute's National Accreditation Commission scheduled for Tuesday which will discuss the fate of the three specialty credentials.
The future of institute-sponsored accreditation programs has been shaky since an institute report created for its regional Council meetings earlier this year said that the accreditation program has had difficulty reaching critical mass. It noted that the PFS and CITP programs have been particularly problematic.
-- John M. Covaleski
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