The Institute of Management Accountants has thrown its support behind the Financial Accounting Foundation’s plan to establish a Private Company Council to improve the process of setting accounting standards for private companies.
The IMA has generally supported the plan first proposed last October by the FAF (see FAF Proposes New Council for Private Company Accounting Standards). In January, the IMA released a statement summarizing its comment letter to the FAF Board of Trustees in support of the proposed plan.
“Private companies are critical to the vitality and growth of the U.S. economy,” said IMA president and CEO Jeff Thomson in a statement. “We indicated early on that FAF achieved the proper balance in its October recommendations—a standards-setting process that gives private companies credibility, flexibility and agility in creating sustainable economic growth.”
Many of the original recommendations from the January comment letter are incorporated in the PCC’s responsibilities and operating procedures, the IMA noted, including details around agenda setting, membership terms, frequency of meetings and the oversight process.
“IMA is encouraged that the FAF took our recommendations into consideration when developing this plan,” said Irvin André Alexander, III, who co-authored the comment letter and chairs the IMA’s Small Business Financial and Regulatory Affairs Committee. “We had tremendous confidence that the original proposal would work. Further, we applaud FAF’s continued efforts to reduce the complexity of financial reporting with its extensive market outreach efforts, including roundtables in four cities which I and other IMA members participated in.”
The FAF also incorporated feedback from the American Institute of CPAs and a number of state CPA societies, which had initially complained that the proposal did not go far enough in making the council independent of the Financial Accounting Standards Board. The AICPA said Wednesday that it too supported the revised plan for the new council.
For further coverage of Wednesday’s announcement about the new council, see New Private Company Standards Council Established, AICPA Says It Supports FAF’s New Private Company Council, and FAF CEO Terri Polley Explains How New Private Company Council Will Function.
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