Scottsdale, Ariz. (May 28, 2004) - The American Institute of CPAs is forging ahead to determine if current GAAP meets the needs of users of private-company financial statements, readying a member-based Web survey and preparing a resource "toolkit" to help state societies conduct town hall-like presentations on the subject, the head of a task force to study differential standards said at the AICPA Spring Council meeting, here.
“The complexity of this issue is evident,” Jim Castellano, who is leading the 16-member task force and serves as chairman of St. Louis-based Rubin Brown & Gornstein, told WebCPA. “This is actually a 30-year-old issue, but each time it was studied it was done with the idea that there was a problem.”
The private company financial reporting task force is comprised of a diverse group of members, including bankers, investors, educators, preparers and representatives from six firms. Castellano said reports associated with the Big GAAP-Little GAAP debate had been issued in 1974, 1981, 1983 and most recently in 1996.
“[The Financial Accounting Standards Board] is moving to the direction of fair-value accounting and there is some consternation as to whether this is the right approach,” Castellano said. “You also have the issue of the convergence to international standards and the fact that FASB is funded by public companies.”
The AICPA collateral materials also will include a Power Point presentation and an instruction booklet for meeting facilitators. He projected a July 31 date for completion of the surveys and said the results should be compiled sometime in August.
Once the task force studies the results and formulates its recommendations to the institute, Castellano said there would most likely be an update on the initiative at the institute’s Fall meeting of Council in Orlando, Fla.
Council members this week also approved a motion to usher in more transparency with regard to the 16-year-old peer review process. Attendees affirmed a multi-tiered initiative that includes a comprehensive member education process as a prelude to a referendum that ultimately would allow peer review reports to be shared with state boards.
In addition, Council members approved the institute’s 2005 budget of $146.8 million, which will include hikes of between $5 and $40 on membership fees, an increase of $35 on dues for its Tax Section, a $100 rise for section members and a $200 increase in application fees for its trio of specialty credentials. The 2005 budget also includes a 7.4 percent rise in salary and benefits for institute employees.
-- Bill Carlino
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