CPA Now

By Allison Henry

PICPA Vice President - Professional & Technical Standards

  • Extra! Extra! FASB Issues First Ever Alternatives to GAAP

    Hot off the press! On Jan. 16, 2014, the FASB issued its first ever alternatives to U.S. GAAP for privately held companies. These changes originated through the Financial Accounting Foundation’s newly created Private Company Council (PCC). The PCC, which was established May 23, 2012, works under the FASB umbrella to propose financial reporting options for nonpublic entities. Proposed changes to U.S. GAAP go through the normal due process, with comments deliberated by the PCC. The FASB reconsiders the revised PCC proposal for potential endorsement. If final endorsement is received, the proposed revisions are issued as Accounting Standards Updates.
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  • The New Auditor’s Report – A Feast for Attorneys?

    On Aug. 13, 2013, the PCAOB proposed radical changes that would require you to communicate audit issues that you, as an auditor, believe to be critical. Is this a roadmap for a lawsuit? Is the PCAOB essentially forcing auditors to engage legal counsel or hire a risk officer just to review audit opinions?
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  • And They’re Off

    The AICPA, for its part, released a completely new special purpose framework designed for small businesses. Called the Financial Reporting Framework for Small- and Medium-Sized Entities, (FRF for SMEs), this new framework offers a simplified financial reporting option for those entities that are not required to use U.S. GAAP. Is this new framework right for your business or clients? The devil, as always, is in the details.
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  • The Comfort Letter Trap

    The relationships between a CPA and his or her clients can last for many years, having been built on a foundation of trust and professionalism. However, the increase in third parties asking for comfort letters threatens these relationships and challenges the integrity and ethical behavior of the CPA as well as their billable hours.
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  • Private Company Accounting Standards: Moving at Lightning Speed

    AICPA’s FRF for SME Task Force achieved a major milestone on Jan. 30 with the conclusion of the comment period for its first draft of the Financial Reporting Framework for Small-and Medium-Sized Entities. The final version will be influenced by individuals and organizations who took the time to respond. The responses are varied and point to the need for extensive education and marketing. The success of the new framework depends how widely it is understood and accepted.
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  • Finally a Cliff Notes Version of GAAP?

    As promised in May 2012, the AICPA actually released its version of private company GAAP on Nov. 1, a special purpose framework, which it is calling the Financial Reporting Framework for SMEs. While it is a lot to print, at 252 pages, consider yourself lucky. The unruly FASB Codification is rumored to be somewhere around 10,000 pages. The new proposal creates a separate reporting framework for small- and medium-sized entities that emphasizes reliability (historical cost principles) and matching.
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  • Announcement on Private Company Reporting: News or Snooze?

    On May 23, 2012, the Financial Accounting Foundation (FAF) board of trustees finalized the structure of a new body, the Private Company Council, which will work to address the needs of privately held entities through changes to U.S. Generally Accepted Accounting Principles (GAAP).
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  • Who’s on First?

    It can be entertaining sometimes to watch the interaction between the SEC, IASB, FASB, FAF, and the AICPA as they debate the future of the U.S. financial reporting system. It reminds me of the Abbott and Costello routine, “Who’s on First?” What started with the signing of the 2002 Memorandum of Understanding between the FASB and IASB...
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