State Board Report
Meetings between NASBA and AICPA leaders and staff have resulted in a joint commitment to ensuring private businesses and the users of their financial statements are not confused about when those businesses should be using Generally Accepted Accounting Principles and when the use of the AICPA’s Financial Reporting Framework for Small and Medium-Size Entities might suit their needs. On July 15 it was announced that the AICPA, with NASBA’s input, will develop a decision-making tool to assist entities with determining whether use of the FRF for SMEs is suitable or not. The AICPA will also develop illustrative financial statements and disclosures to distinguish FRF for SMEs-based financial statements from GAAP-prepared statements.
NASBA Vice President – State Relations Daniel J. Dustin took the lead in working with the AICPA’s representatives to address the concerns NASBA raised about the non-authoritative FRF framework (see sbr 7/13). Both NASBA and the AICPA have stated they are committed to the Private Company Council’s eventual success in developing a GAAP-based financial reporting model for all private companies.
The July 15 joint statement from NASBA and the AICPA concluded: “CPAs who report on financial statements prepared in accordance with GAAP, or a special purpose framework, such as the FRF for SMEs, will be held to the highest standards of professional practice by U.S. Boards of Accountancy.”
President Ken L. Bishop wrote to State Board members: “NASBA’s Chair Gaylen Hansen recently said, ‘There is no middle ground when it comes to the public interest,’ and he is right. In this effort, we have compromised on both implementation and some objective differences, but we have, together with AICPA, made the public interest mandate the bedrock of our agreement to work together. At the upcoming AICPA/NASBA Summit meeting [August 9], I hope to discuss how to develop strategies to avoid these types of escalated disagreements in the future.”
- MEMBER CENTER