NEWS RELEASE 03/04/11
Financial Accounting Foundation Outlines Plans to Address
Norwalk, CT, March 4, 2011—The Board of Trustees of the Financial Accounting Foundation (FAF) announced today the formation of a Trustee Working Group to address the important topic of accounting standard setting for nonpublic entities. The establishment of the Working Group represents a major development in the FAF’s ongoing work on this key strategic priority.
Standard Setting for Nonpublic Entities
As a first step in the process to look at one component of this issue, the FAF created the Blue-Ribbon Panel on Standard Setting for Private Companies, sponsored jointly with the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA). The Panel concluded its work in January 2011, upon issuance of its report to the Trustees. The establishment of the Working Group is the next phase of the FAF’s review of the adequacy and effectiveness of the Financial Accounting Standards Board’s (FASB) efforts in setting standards for the private company and non-profit sectors in the United States.
The Working Group will conduct outreach to stakeholders in various ways, including roundtable meetings, surveys, and meetings with advisory and constituent groups and others. In conjunction with obtaining input on the scope of the issues and concerns to be addressed, the Trustees also will seek input on suggested improvements, including the solutions recommended by the Blue-Ribbon Panel.
John J. Brennan, FAF Chairman, said, “The FASB has an enormous responsibility in setting accounting standards for all nongovernmental entities in this country. The FAF Trustees’ initiative to review the unique needs and challenges of non-profit entities and private companies is part of our commitment to ensuring that the processes and resources are in place to meet the financial reporting needs of all providers of capital, preparers of financial statements, auditors, regulators, and others. We look forward to sharing our findings with all of the FASB’s constituents.”
About the Financial Accounting Foundation
The FAF is responsible for the oversight, administration, and finances of both the Financial Accounting Standards Board (FASB) and its counterpart for state and local government, the Governmental Accounting Standards Board (GASB). The Foundation is also responsible for selecting the members of both Boards and their respective Advisory Councils.
About the Financial Accounting Standards Board
Since 1973, the U.S. Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting and reporting in the United States. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit its website at www.fasb.org.