Panel set to tackle private standards assurancenews
BY GLENN CHENEY / NEW YORK
The group revealed that it plans to meet
four or five times in public meetings, and the
key topics that it will address include a closer
look at the recently issued International Financial Reporting Standards for Small and
Medium-sized Enterprises, the cost of preparing statements in U.S. generally accepted
accounting standards, and the problems
associated with transitioning from being a
private company to being a public one.
At press time, the first meeting was scheduled for April at the headquarters of the
American Institute of CPAs. The panel plans
to issue a report and recommendations to
the Financial Accounting Foundation by the
end of 2010.
A move toward private company standards would not necessarily be one to rush
into during a period of economic recovery,
but panel chairman Rick Anderson, who also
serves as chairman of Seattle-based CPA and
business advisory firm Moss Adams, said that
it may be a perfect time to be asking the right
questions.
“First of all, if any change occurs — and I
emphasize the if — we’re not talking about
change in six months,” Anderson said. “In
some respects, there’s no better time to ask
questions than in a volatile time, because it
exposes any issues that do or don’t exist. So
maybe this is a great time to do it. We’ll see
whether or not a separate set of standards
could have or would have been more useful
for private companies.”
By the full agreement of the three spon-
soring organizations — the AICPA, the FAF
and the National Association of State Boards
of Accountancy — the majority of the panel
members are users of financial statements.
Other members represent auditors and the
preparers of financial statements.
One major factor the panel must consider
is the recent issuance of IFRS for SMEs by the
International Accounting Standards Board.
The blue ribbon panel formed in December to address the 30-
year-old debate over whether to issue a separate set of reporting standards for private companies is set to address a number
of key issues that hopefully will move the protracted discussion
to the next level.
The first step: determining the right questions to ask
The standard, which public companies in the
U.S. have the option of adopting, may provide
the information that most users of financial
reports need.
Tom Quaadman, executive director of the
U.S. Chamber of Commerce’s Capital Markets
counting Standards Board has done,” said
Quaadman. “One issue we need to address
here in financial reporting is something other
countries don’t have to worry so much about
— litigation. We are a litigious society, and
our financial reporting has to reflect that.”
David Hirschmann, the center’s president
and chief executive officer, will be represent-
ing the U.S. Chamber of Commerce on the
blue ribbon panel.
SEC APPROVES PCAOB
FOREIGN INSPECTION DELAY
WASHINGTON, D.C. — The Securities and
Exchange Commission has approved a
rule amendment from the Public Company Accounting Oversight Board giving
the board the option to delay for up to
three years the original 2009 deadline for
the first inspection of 49 non-U.S. firms
in 24 jurisdictions in which the board has
not previously conducted an inspection.
The PCAOB would instead conduct the
inspections through 2011, according to a
sequence based on the U.S. market capitalization of the 49 firms’ issuer clients.
‘In some
respects,
there’s no
better time
to ask
questions
than in a
volatile time,
because it
exposes any
issues that
do or don’t
exist.’
Competitiveness Center, noted that the standard for small and midsized entitites would
not necessarily solve the problem.
“It behooves everyone to have the discussion and look at what the International Ac-
STARTING WITH THE BASICS
Anderson reiterated that while the panel may
discuss the usefulness and cost-effectiveness
of specific standards, it would do so as part
of an analysis of the process that brought the
standards into existence.
“Who are the actual users of private company financial statements and how do they
use GAAP financials in their decision-making?” asked member Billy Atkinson, chairman
of the National Association of State Boards of
Accountancy. “What is the key decision-use-ful information that the various users need
from GAAP financials?
Atkinson said that you need to ascertain
whether GAAP is meeting users’ needs, and
whether the benefits of GAAP financials outweigh the cost of preparation.
He added, “To the extent that current GAAP
is not meeting user needs in a cost-beneficial
manner, what are some possible alternatives
for private company standards, such as separate stand-alone standards, base-level standards for all entities with additional disclosure requirements for public companies, and
what are the implications for standard-setter
structure and processes?” AT
NASBA EXTENDS TESTING PACT
WITH AICPA, PROMETRIC
NASHVILLE, TENN. — The National Association of State Boards of Accountancy
has signed an amended and restated
computer-based testing agreement
between NASBA, the American Institute
of CPAs and Prometric — extending their
original agreement to 2024. NASBA said
that the agreement is consistent with the
terms and conditions that were shared
with state boards of accountancy during
NASBA’s 2009 annual meeting.
IFAC RE-EXAMINES PRIORITIES
NEW YORK — The International Federation of Accountants has revised its Global
Leadership Survey, modifying some of
the top priorities it heard from its membership on the work it should pursue.
IFAC originally published the report on
January 15, but withdrew it a week later
to incorporate additional responses.
In the revision, the accountancy organization chief executives surveyed said that
IFAC needs to continue to encourage the
convergence of standards developed by
independent standard-setters relating
to auditing and assurance, education,
ethics, and public sector accounting, and
to support the implementation of those
standards — in particular, promoting the
adoption of high-quality international
standards from IFAC and the International
Accounting Standards Board. More than
half believe that building confidence in
international standards and influencing
their adoption will increase in importance
over the next three years.
