Setting private company accounting standards: Recent recommendations miss the mark

March 2011

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At a glance

Private companies are concerns about the complexity of accounting standards, and recent recommendations from a Blue Ribbon Panel could potentially add more complexity. A simpler alternative approach focuses on quality financial reporting and would limit unnecessary differences, reduce standard-setting costs, and reduce the complexity of financial reporting for all companies, public and private.

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Highlights

• An advisory panel recommends the creation of a second US accounting standard-setting board. The second board would have full authority to make exceptions to accounting standards for use by private companies.
• This recommendation would reduce the quality of information provided to users and create undue cost and complexity.
• We support a single US standard-setting board and a more measured approach to changes in the standard-setting process.