Both your editorial and the article "A line in the sand" (November 2011, page 1) miss the point. "The three-decade-old issue of private standards" is being addressed once again. And that's good! The problem

is that the solutions being put forth have one major fault. There is no real representation of small business in the Financial Accounting Standards Board or the proposal for the American Institute of CPAs to be the standard-setting body for small business.

The one organization that represents only practicing CPAs, the National Conference of CPA Practitioners, is not represented on the Blue Ribbon Panel, FASB or the standard-setting groups of the AICPA. These are the CPAs who prepare the financial statements for small business, who assist small business with their banking and credit needs, and who understand the problems and opportunities of small business.

Both FASB and the AICPA have had 30 years to come up with standards to help small business. Until the recent recession and downturn of the U. S. economy, neither organization really seemed to recognize that "small business" was a major factor of the nation's financial system. GAAP was the rule that was promulgated primarily to place controls on publicly held companies, and small business had to cope with it, in spite of the difficulties it presented.

Now the Blue Ribbon Panel has come up with a plan that is supposed to give relief to small business. The members of the panel are well-known, well-meaning, interested, successful and devoted people. Their intentions are honorable and sincere. None of them really represent small business.

It would appear that the members of the BRP and FASB (who may have had some background in small business many years ago) are now part of the "big business" mentality. The AICPA, for all its well-intentioned efforts, has really very little knowledge of small business and what their needs are as regards their financial statements.

Without representation by the NCCPAP, FASB or the AICPA will probably produce a warmed-over model of GAAP, rather than a clear, concise set of new rules, planned and designed for the millions of small businesses in the U.S.


Edwin J. Kliegman, CPA

Founding partner, Marcum & Kliegman

Past president, NCCPAP

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