Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Looks like ‘little GAAP’ will be closer to ‘slightly-less-than-big-GAAP’

with 3 comments

Here’s the path the Financial Accounting Foundation has chosen for addressing the big GAAP/little GAAP issue, as announced on October 4:

Establishing a new body, under the oversight of the FAF, to identify standards that require modification and to vote on specific proposed exceptions or modifications that would then be subject to ratification by the FASB and submitted to the public for comment

The FAF would create a new entity under its supervision, the Private Company Standards Improvement Council (PCSIC).  Shall we call it Pic-sic?  That new group would identify pieces of GAAP that should be modified for private companies.  They would approve revisions, which would have to be ratified by the FASB.

So the solution to the standards overload is not to have a separate board, but a group that is under the FAF, with its chair being a member of FASB, and all actions ratified by FASB.

Doesn’t look like such a great idea to me since FAF will pick the members of Pic-sic and FASB will have to approve all departures from GAAP.  That looks like a formula that will not allow much of a separation between the two sets of rules.

Comment letters due by 1-14-12.  Get your computers warmed up.

FASB announcement here, with the three-page executive summary here.

The Maryland Society is not amused.  See their comments at: CPAs: FAF plan for private standards ‘misses the mark’

Background article at: Proposal Would Create New Accounting Standard-Setter for Private Companies. (hat tip Going Concern for the NYT article.)

Written by Jim Ulvog

October 5, 2011, 6:49 am at 6:49 am

Posted in Accounting

3 Responses

Subscribe to comments with RSS.

  1. […] mentioned earlier that the FAF, parent of FASB, wants to set up a group that would carve out portions of GAAP that did […]

  2. […] announcing they will set up a new standard-setting body if FAF goes forward with its plan to keep PCSIC (Pic-sic?) under the control of […]

  3. […] I’ve mentioned this here and here. […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: