State Board Report
In late January, I received a telephone call from a State Board member recounting a meeting he had recently attended during which a representative of a large accounting association had made “slanted remarks” about NASBA and another regulatory body. As I listened to the Board member’s concern, I too was somewhat annoyed by what was said, but I recognized that the remarks may have been tongue-in-cheek and any broad statement was certainly made for the purpose of being persuasive on an issue. As I was thinking about this month’s President’s Memo, I was reflecting on that conversation and, more importantly, the pathways organizations take to getting to consensus or middle ground positions.
Many of you have read or heard me speak on my perspective regarding professional relationships. I have a pretty simple formula: (1) clearly and accurately articulate your position(s); (2) never blind-side your associates; and (3) never throw them under the bus. In even more concise terms: develop and nurture trusting relationships.
To be clear, having trusting, or even friendly, relationships does not mean that you have to agree on every issue or position. A recent example was the stalemate between Democrats and Republicans on how to resolve the impending “fiscal cliff.” Two individuals who could not be farther apart in their political philosophy, Vice President Joseph R. Biden (D) and Kentucky Senator Mitch McConnell (R) were able to meet privately to develop a consensus deal. These two men, both in their 70s, had developed trust for one another during their careers and were able to get past the “slanted remarks” to reach agreement. Similar pairs or groups have existed throughout our history. Just think of our country’s founders from 13 distinct colonies.
So how does this relate to our world of accountancy? It is not uncommon for State Boards and State Societies, AICPA and NASBA, or other associations and bodies to come down on different sides of an issue. There are certainly close, and often trusted, relationships that exist between these disparate groups, but to outside observers the debate may seem adversarial – and possibly dysfunctional. State Boards always have the public interest as their first priority, but at the same time they hold that a healthy profession serves the public interest. In reality, I believe it is healthy for the profession that important issues and positions are challenged and vetted. Having strong positions without equal zeal and passionate arguments in support of them does little to explore and advance the issues. Unfortunately, that dedication occasionally results in some “slanted remarks.”
Recently, NASBA responded to an AICPA exposure draft: Proposed Financial Reporting Framework for Small- and Medium-Sized Entities. The NASBA Board of Directors concluded that there were public protection concerns in the proposal and urged the AICPA to either table or withdraw the proposal in order to allow the Financial Accounting Foundation’s Private Company Council (PCC) adequate time to develop authoritative standards that are a part of generally accepted accounting principles (GAAP). Both AICPA and NASBA have strong and passionate positions on this issue that may result in “slanted remarks” from both sides. Again, to the outside observer, this disagreement may seem to be a chasm that is wide and deep. The public debate, however, began back in 2010 when NASBA joined with the FAF and AICPA to form a panel addressing how U.S. accounting standards could best meet the needs of users of private company financial statements. NASBA agreed with the AICPA that current GAAP did not meet the needs of small- and medium-sized private companies. It is in how we fix the standards that we disagree. Hopefully, through our trusted relationships we can get to consensus.
In past articles I have written about the importance of NASBA being relevant so that it can effectively be the collective voice of Boards of Accountancy. With relevance comes the responsibility of thoughtful and impactful opining on any proposed standard, practice or policy that could negatively affect our State Boards’ ability to protect the public. To do so is our mission, our plan and our passion. It is a given that, on occasion, this will require us to disagree with others – even our friends. So be prepared, you may hear some “slanted remarks,” but hopefully leading to meaningful solutions.
Semper ad meliora. (Always toward better things.)
— Ken L. Bishop
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