A trio of state accounting boards have objected to the 'jointness' of a joint project from the Financial Accounting Standards Board and the American Institute of CPAs to form a committee to look at the financial accounting and reporting standard-setting process for private companies.

The groups -- the National Association of State Boards of Accountancy, the Colorado State Board of Accountancy and the New York State Board for Public Accountancy -- chiefly objected to the AICPA's involvement in forming the committee, not the project itself. Generally, the groups said the committee needed to bring an air of independence to the project, something that FASB alone was better suited to providing.

NASBA's letter, signed by chairwoman Diane M. Rubin and president and chief executive David A. Costello, t ook the objections a step further, noting that, "In 2002, the FASB determined that the AICPA should cease issuing Statements of Position that create new generally accepted accounting principles." The duo suggested, as did the other objecting boards, that FASB form a committee with representation from the accounting profession, industry, academia and regulators.

FASB and the AICPA announced the project in early June, saying that they would sponsor and fund an 11-member committee to serve as a resource to the FASB and ensure the views of private company constituents are incorporated into the standard-setting process. Under the proposal, FASB would implement certain improvements to enhance the transparency of its standard-setting process for private companies and consider input from private company constituents.

In the release announcing the initiative, the AICPA said that it has already begun recruiting a dedicated staff member to assist the committee with the work. An AICPA study, which found several groups supported the development of private company standards, was cited as a driver behind the effort.

A majority of the 85 comment letters regarding the proposal, which were accepted through Aug. 15, were largely positive. All of the comment letters are available online at www.privatecompanyfinancialreporting.org.

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