The AICPA and the National Association of State Boards of Accountancy are friends again.
After sparring over the AICPA’s release of its Financial Reporting Framework for Small and Medium-Sized Entities, the groups have released a joint statement that seems to calm the waters. The statement makes the following points:
- The AICPA and NASBA strongly support the work of the new Private Company Council, which is in the process of developing a financial reporting model for private companies based on Generally Accepted Accounting Principles.
- New tools will be developed to help companies determine if the AICPA’s framework could be a reasonable alternative when GAAP is not required.
- The AICPA’s framework should not be confused with GAAP.
“We believe that preparers and users of private company financial statements should responsibly assess the accounting approach to meet their current and future needs depending on individual company facts and circumstances,” the statement reads. “… The AICPA and NASBA are committed to engaging in an effort to ensure that the FRF for SMEs, as a non-authoritative framework, is not confused with GAAP and that entities that utilize GAAP or a non-GAAP solution do so in a suitable and transparent manner.
“CPAs who report on financial statements prepared in accordance with GAAP, or a special purpose framework, such as the FRF for SMEs, will be held to the highest standards of professional practice by U.S. Boards of Accountancy,” they add.