Accounting Today - December 2011

Sarbanes-Oxley. (See our October column, “The top 11 falsehoods about the IASB, IFRS and U.S. adoption.”)

Nonetheless, October’s onshore arrival of IASB’s chairman Hans Hoogervorst prompted Melancon to roll out a political red carpet by demanding the SEC allow large public companies to adopt IFRS on their own. Thus, he offered an affront to the great many institute members who oppose abandoning GAAP and FASB.

Of course, he has the right to express his own opinion but, in light of his position as the AICPA’s chief spokesman, he should clearly disclaim that he is not expressing an official position, just like we do.

FROM PAGE 20

To explain what we think they’ve
missed, useful private company
statements will assist users in the
prime activities of assessing an en-
tity’s creditworthiness and its value
in an acquisition. From all we hear,
lenders routinely disregard poten-
tial borrowers’ GAAP financial re-
ports and, as one CPA explained to
us, acquirers are usually better off
working out an offering price on the
back of a napkin instead of starting
with traditional statements.

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EXHIBIT E: LOBBYING FOR
PRIVATE STANDARDS

Melancon has also taken a very hard public line on the private company standards controversy. On the October day we began drafting this column, the institute’s council threatened (surely at his urging) to create its own board if FAF didn’t reverse its position. Obviously, all these people seem to have again gone astray and forgotten why the institute was stripped of authority to produce accounting and auditing standards. They’ve also overlooked the fact that 55 CPA licensing authorities actually have the final say on this issue.

Besides their presumptiveness in disregarding members’ alternate views, we question their political acumen. Simply put, after years of bashing FASB and advocating that it be dissolved, they can’t actually expect the FAF to comply with their demands.

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EXHIBIT F: NOT UNDER-
STANDING PRIVATE COM-
PANY STANDARDS
We also question management’s
position because it shortsightedly
reflects the view of only those who
supply financial statements with-
out fully articulating the more im-
portant perspective of those who
use them. They simply have not
adequately contemplated how pri-
vate company standards need to be
reformed and how those reforms
would be best accomplished.