AICPA President, CEO and former Mr. Universe Barry Melancon, CPA, CGMA wrote a letter to the Financial Accounting Foundation recently to provide feedback on the FAF's review of the Private Company Council. This in and of itself, is not all that interesting, although you get the distinct impression that AICPA relishes in the opportunity to tell the FAF what's what. We'll take a look at that because it's fun.
Like much solicited feedback, the AICPA's letter is one part, "NICE HUSTLE, GUYS," and many, many parts of, "YOU'RE DOING IT WRONG."
Here's the encouragement:
We applaud the spirit, commitment, and dedication demonstrated by the FAF, the FASB Board, the PCC, and the FASB staff. The combined efforts to date have shown that all parties involved have been listening to the private company constituencies. Regardless of how many constituents take the time to write a letter to FAF, we can assure the FAF, based on our vast contacts with private companies and their public accounting firms, that the FASB/PCC output has been extremely well received and appreciated, and these same constituents look forward to continued momentum in aggressively addressing private company issues.
The tone of the Request suggests to us that FASB’s and PCC’s work on existing GAAP is largely done. If that tone was FAF’s intent, we do not agree. FASB and PCC have been doing good outreach with private company constituents to identify existing GAAP topics that should be reviewed by the PCC. Our sense from that continuing outreach, and some of our own in developing this letter, is that FASB and PCC have more work to do on existing GAAP.
Considering that many FAF Trustees are not representative of the private company constituency, it is critical that FAF have a Trustee representative and process in place so that FAF stays close to and connected with the FASB Board, PCC, and FASB staff continuing private company efforts.
And last but not least, could you put someone else in charge?
We believe that the current PCC Chairman also has set a high bar. The next PCC chairman will need to be a strong, proven leader with an unquestioned dedication and resolve to combat against forces that would seek to derail FAF’s commitment to private company financial reporting. And we strongly suggest that FAF try to avoid any initial perception bias that the next PCC chair is not representative of the mass private company constituency.