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State Board Report

November 2013

Both the AICPA’s Financial Reporting Framework for Small- and Medium-Sized Entities and the Financial Accounting Standards Board’s Public Company Council have the same goals of improving the relevance of financial reporting for private companies, but the AICPA is committed to the success of the PCC, AICPA Chairman William Balhoff told the NASBA Annual Meeting. “While we may have differed initially on the application of the Framework, we have been able to work through the issues, together, and affirm the process of open dialogue. We appreciate NASBA’s input on the decision- making tool that assists entities with determining whether use of the FRF for SMEs is suitable or not. This tool will ensure that the marketplace is not confused about the different purposes of each of these projects,” he stated.

Mr. Balhoff also praised the changes jointly proposed for the Uniform Accountancy Act, which revise the definition of “attest” and provide for firm mobility. “Amending the definition of attest is an issue of public protection. There is genuine risk to the public interest associated with non CPAs issuing reports using AICPA standards,” he noted. While he believes firm mobility is the next logical step for creating the regulatory environment for CPA firms of the future, Mr. Balhoff stated: “The AICPA hopes all states will move on passing firm mobility; however, we understand that there are political and financial considerations that mean that different states will move at different times.”

He pointed out that the AICPA Trends report for 2011-12 recorded the most accounting graduates ever, with more than 82,000, and that in 2012 the public accounting firms reported hiring more than 43,000. “Amazingly, 89 percent of firms responding to the survey said they expect at least the same level of hiring next year – all this during a period of high unemployment,” Mr. Balhoff said.

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