Apparently SEC chief accountant James Kroeker does not appreciate the AICPA’s disapproval of the FAF’s new proposal to set up a Private Company Standards Improvement Council, calling the disapproval “a clear threat to the independence of the FAF.”
Accounting Today has the entire story but the short version is that Kroeker went off at Monday’s Standard & Poor’s Accounting Hot Topics Conference in New York, calling the AICPA’s resolution “egregious.”
In case you forgot, at last month’s fall meeting of AICPA Governing Council, members overwhelmingly approved a resolution that sent the Financial Accounting Foundation (FAF) a strong message: either FAF moves to adopt the Blue Ribbon Panel on Standard Setting for Private Companies’ (the Panel) recommendations for a separate board— which is the AICPA’s preference— or the AICPA will consider other options.
At that time, the AICPA made it clear that if FAF continued to pursue its current proposal, the AICPA board of directors would look at other solutions for addressing the needs of private companies. This could include creating a separate standard setting body to develop private company generally accepted accounting principles (PCGAAP) or a comprehensive private company-specific basis of accounting that would deliver meaningful, lasting improvement to private company financial reporting consistent with the Panel’s recommendations.
Maybe Kroeker should go hang with the AICPA and cuddle up to watch the upcoming webcasts that outline FAF’s proposal?
We’re not sure why Kroeker is so butthurt, nor why he would dare take on 350,000 CPAs by calling their wishes “egregious” but that’s a different matter entirely.
A blue ribbon panel on private company accounting is holding its inaugural meeting Monday, to assess how financial reporting standards can best meet the needs of users of US private company financial statements, which are mostly for bankers and other types of lenders.
The panel, formed by the Financial Accounting Foundation, the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy, will meet five times throughout the year and will issue a report with recommendations on the future of standard setting for private companies by the end of the year.
The debate has resurfaced after the International Accounting Standard Board issued international standards for private companies last July (called IFRS for SMEs). Financial experts have been discussing this topic for decades. For instance, in 1996, the Financial Executive Research Foundation issued a paper titled “What do users of private company financial statements want?”
Some of the old and new questions the panel will address:
• What is the key, decision-useful information that the various users need from GAAP financial statements?
• Are current GAAP financial statements meeting those needs?
• How does standard setting for private companies in the US compare to standard setting in other countries, both those that have adopted IFRS for small and medium-size entities and those that have not?
To the extent that current GAAP is not meeting user needs in a cost-beneficial manner, what are some possible alternatives or private company standards?
Even if GAAP is found wanting, however, the panel might not be all that keen on IFRS as an alternative, given the limited experience of US companies with the international regime and rising skepticism on the part of the Securities and Exchange Commission about the independence of the body setting international standards.
Not that public or private US companies are eager to switch to IFRS, which will be costly and cumbersome. At this point, it seems as if private ones would rather have the accounting devil they know, except they no doubt wish it were a bit less hellacious on their results. And that’s been pretty much a forlorn hope for years.
• Porn Nightmare Never Ends for SEC Official [FINS]
Whatever your porn preferences, you’re probably not sharing them with complete strangers. If you are, the cloud of awkward around you has got to be so thick that you may as well have leprosy. However, if you have the unfortunate luck of getting caught viewing this art form at work, then you might be forced to discuss your preferences, how often you’re engaging in the activity, among other things:
[T]he really juicy stuff begins when he’s asked about accessing Web sites like tgirlhotspot.com and ladyboyx.com (warning, very NSFW) : “Our records show that on Wednesday, August 13, 2008, beginning at 1:57 p.m., you made approximately 85 attempts…to access a Web site called tgirlhotspot.com. Do you have any recollection of attempting to access this site?”
The employee answers: “I do not personally have recollection of it, but it would not surprise me.” To which the inspector — and the reader — responds: “Okay. That’s fair.”
Seriously, who can remember every instance that they’ve visited ladyboyx.com? Does the guy have a photographic memory? Maybe on certain images but date, time, and spreadsheet you had open that you could quickly jump to in case someone came to close? That’s asking a little much.
• Should the U.S. Forget about Private-Company GAAP? [CFO Blog]
Now that the Blue Ribbon Panel for private company GAAP has been announced, it makes some people wonder if the non-SEC types will just ignore this whole song and dance the Commission is doing get with the IFRS program ASAP. Ahh, the advantages of being a private company…
Even though both the BRP and the SEC will release their musings on their respective topics in 2011, private companies already have options, “[T]he U.S. private sector has already set some IFRS wheels in motion. In 2008, AICPA recognized the IASB as an official standard-setter, which means U.S. auditors are allowed to issue opinions on private-company financial results filed using IFRS.”
It’s doubtful that IFRS reporting will spread like H1N1 among private companies but while the SEC twiddles the private sector seems to recognize where all this is ultimately going.
• Jason Chaffetz: Ax Hill staff tax cheats [Politico]
Since all the members of the House are up for reelection this year, everyone needs something solid to campaign on and apparently Jason Chaffetz (R-UT) has found his stump.
Chaffetz is introducing legislation that would extend an IRS policy — termination employees that haven’t paid their federal taxes — to all federal departments and agencies.
In 2008 alone, 447 House employees and 231 Senate workers didn’t pay their taxes, according to figures from the IRS, Office of Personnel Management and Department of Defense.
“We have over 600 staffers on Capitol Hill not paying their taxes. That’s just not acceptable,” Chaffetz said in an interview with POLITICO. “It’s disingenuous to take federal taxpayer dollars and not pay your full share of taxes. It’s wrong.”
Between to the two bodies in Congress, over $8 million are owed in taxes. We don’t have to remind anyone how little money this is grand scope of the federal government. But hey! Rep. Chaffetz has an election to win and by God, this could be the ticket. Some other notable delinquent federal employees include the Postal Service at $257 million; Dept. of Veteran Affairs at $131 million; Army and Navy owe $81 million and $61 million respectively.
But pointing out those people wouldn’t make for very good press.