David Glusman, Advisory Services Partner, Quoted in Accounting Web Article "NASBA Opposes AICPA's Proposed FRF for SMEs"
By Frank Byrt
The long-running debate over who’s responsible for developing a framework for standards for financial reporting by privately held, small and midsized US businesses is far from over.
The American Institute of CPAs (AICPA) is getting push back for its Proposed Financial Reporting Framework for Small- and Medium-Sized Entities, which would create a non-GAAP (generally accepted accounting principles) financial reporting framework for small and medium-sized entities (FRF for SMEs).
The AICPA says its proposal will result in a less complicated and therefore less costly accounting system for smaller, privately held firms than one that would come from having to adhere to the requirements of GAAP, while still presenting an accurate financial picture of the business.
But on the other side of the debate is David Glusman, CPA and partner-in-charge of Marcum LLP’s Philadelphia office. He says that he and his firm “believe that the AICPA proposal is a good proposal for our clients and for small and midsized businesses.”
Glusman said, “My point of view is ‘what does the business community need and want?'” Holding smaller, privately-held businesses to the same GAAP standards as huge, publicly-held companies “is overkill. The people who read their financials are management, who may be entrepreneurs or family, their bank, and maybe some outside investors.
“The bankers are the biggest users of their financials and they don’t need the over-reporting,” rather, they’re most interested in whether the company is in compliance with its loan covenants, Glusman said. “For a long time, it’s been a debate of big GAAP versus little GAAP, and I think the AICPA’S current draft is a good resolution that makes [reporting financials] for small and midsized businesses more efficient and saves them time and money.”