Sada Kempf, Senior PR Associate
MILWAUKEE, Wis. (December 6, 2011) – Clifton Gunderson LLP is intensifying its efforts to urge the Financial Accounting Foundation (FAF) to establish an independent board to set standards to U.S. generally accepted accounting principles (U.S. GAAP) for private companies. CEO Kris McMasters, CPA, is leading the efforts for the firm, which includes participation from the firm’s nearly 700 certified public accountants in an aggressive campaign focusing on the needs of privately held businesses and their owners. The firm is working closely with its private company clients to help ensure their voices are heard on this important issue.
“FAF has really missed the mark when it comes to the needs of privately held company constituency,” said McMasters. “While FAF’s proposal recognizes the need for modifications to accounting standards, its methods for making these changes still follows a path that has failed for over 40 years. Unless there is a separate board, the concerns of users and preparers of privately held companies’ financial statements will not be fully met. As a leader within the accounting profession and as a firm that champions the needs of private companies, we need to ensure the voices of private companies are heard. The time to act is now.”
The firm is spearheading a letter-writing campaign leveraging its CPAs and private-company clients, urging them to express their disappointment directly to FAF regarding its failure to call for an independent board. To join Clifton Gunderson in taking a stand on this important initiative, the firm is providing a number of resources, including a sample letter-writing template provided by the AICPA and information to help clients and constituents understand the issue. To learn more, visit http://www.cliftoncpa.com. The comment deadline is January 14, 2012.
In 2010, the American Institute of CPAs worked with the FAF and the National Association of State Boards of Accountancy to form the Blue Ribbon Panel on Private Company Financial Reporting, which included lenders, representatives of the investment community, business owners, financial statement preparers and public accountants. The Panel explored the changes necessary to best meet the needs of U.S. users and preparers of private company financial statements. On January 25, 2011, the Panel sent its report to the FAF’s Board of Trustees. An overwhelming majority of the Panel’s members agreed that the financial reporting problems affecting private company constituencies could be alleviated by implementing the following recommendations:
Changes and modifications should be made to existing U.S. generally accepted accounting principles, where appropriate, for private companies to reflect their financial statement users’ unique needs. A separate board with standard-setting authority should be created, under the FAF’s oversight, to incorporate the necessary changes effectively. The new board would consist of members with private company constituent experience and work closely with the Financial Accounting Standards Board.
McMasters, a past member of the Blue Ribbon Panel on Standard Setting for Public Companies, is a strong advocate for change. “FAF has rejected the voices of a diverse panel that understood the needs of private companies and their financial statement users. An independent, authoritative board is necessary for true and lasting improvements to private company financial reporting,” she said.
Clifton Gunderson’s focus on private companies will take on new meaning in the new year. On January 2, 2012, pending final approvals, Clifton Gunderson will merge with accounting firm LarsonAllen LLP. The new firm will be named CliftonLarsonAllen (CLA). CLA will bring together two firms of significant magnitude to offer unprecedented emphasis on serving privately held businesses and their owners, as well as entities in the public sector — not-for-profits and governmentals. Access to a firm with a top 10 presence and capabilities committed to serving primarily these types of clients is rare. The new firm will have more than $550 million in combined revenue, employ more than 3,600 professionals, including 500-plus partners, and will operate from 25 states and Washington, D.C.
About Clifton Gunderson
Clifton Gunderson, ranked as one of the nation’s largest certified public accounting and consulting firms and the largest U.S. member firm of HLB International, provides a wide range of assurance, tax and consulting services to clients in a variety of industries. Founded in 1960, Clifton Gunderson has a staff of more than 1,800 professionals serving clients from 47 offices across the country. Clifton Gunderson, and the separate and independent member firms of HLB International, provides personal and high quality service to clients in over 100 countries through the HLB International “Global Care” approach. For more information about Clifton Gunderson, visit http://www.cliftoncpa.com.