New York (July 12, 2004) -- The American Institute of CPAs has launched a Web-based survey to poll the stakeholders of private company financial reporting to determine if general purpose financial statements prepared for private companies’ stakeholders are meeting their needs.
A key issue related to this question is whether or not the cost of providing all that is required in private company generally accepted accounting principles financial statements is justified, as it may be for publicly traded companies.
“With small and young companies creating two-thirds of the net new jobs in our country, and employing half of all private-sector workers, it is time to address this topic in an in-depth manner,” said James Castellano, chairman of the 16-member AICPA task force that is exploring the issue.
The task force, comprised of bankers, investors, educators, preparers and representatives from six firms, was formed in March in response to a deluge of inquiries regarding private company financial reporting in the wake of Sarbanes-Oxley. Concerns to be researched by the task force include frustration with the relevance of the current body of GAAP literature to smaller, private companies; a belief among some CPAs that lenders aren't using all of the GAAP information required in financial statements; the cost/benefit equation for private companies of certain reporting and disclosures that may have been designed primarily for public companies; and a trend on the part of the Financial Accounting Standards Board toward convergence with international accounting standards and fair-value accounting.
Castellano added that the task force leading the research effort "has by no means reached any conclusion and has worked to ensure the survey asks the necessary questions to elicit what will most likely be diverse points of view from those being surveyed.”
The AICPA said that the survey will be accessible until Sept. 15 at http://survey.themsrgroup.com/aicpa.html, and will also reach various stakeholders via a separate phone survey. Results will be announced in the fall.
“Our goal is to capture views of the broadest as well as the obvious key stakeholders affected by private company financial reporting,” said Daniel Noll, director of accounting standards.
A discussion paper on various topics related to private company financial reporting is posted on the AICPA Web site at http://www.aicpa.org/members/div/acctstd/pvtco_fincl_reprt/index.htm.
In addition to the survey, Castellano said at the Spring Council meeting in May that the AICPA is preparing a resource "toolkit" to help state societies conduct town hall-like presentations on the subject.
-- WebCPA staff
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