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Small- and medium-sized businesses in the United States may be able to use sim-
pler methods for measuring and presenting their financial statements under new
accounting guidelines announced on 10 June.
The Financial Reporting Framework for Small- and Medium-Sized Entities,
released by the American Institute of CPAs, is designed to provide an alternative
reporting option to small U.S. businesses that are not required to use Generally
Accepted Accounting Principles.
“It is a framework that is tailored for small businesses – a very relevant, simpli-
fied framework,” Bob Durak, the AICPA’s director of private company financial
reporting, told The Wall Street Journal.
The framework avoids unnecessary complexity and costs, focusing on business
profitability and cash available, which are areas that are more relevant to the
primary users of the financial statements of small private businesses.
Durak said the new guidelines were a response to market demand and “tai-
lored” to the needs of small businesses. “ This really is a game-changer,” Durak
was quoted as saying by Accounting Today. “It’s cost-effective, and a simplified
approach. It had become very clear to us that there was a need for a non-GAAP
reporting option, and this is the CPA profession in action responding to the needs of
the small business community.”
He also made clear that the framework is not a replacement for GAAP. Instead,
it is a “comprehensive basis of accounting with a framework around it for enhanced
financial reporting,” he said.
Businessmen arrested over
Olympus accounting scandal
Three businessmen in Japan were arrested last
month on suspicion of illegally transferring ¥2.2
billion (HK$178 million) in alleged reward money
from Olympus Corp. to overseas bank accounts
for helping the electronic equipment maker con-
ceal losses. According to the arrest warrant, the
three men, who received the money in 2008,
covered up the losses by overstating the compa-
ny’s 2006 and 2007 financial statements by ¥110
billion each, The Japan Times reported.
List of best U.S . accounting
firms for women unveiled
A list of the best public accounting firms for
women was announced last month as part of the
United States-based 2013 Accounting MOVE Proj-
ect, which promotes the advancement of women
in the profession. Eleven firms, including Baker
Tilly Virchow Krause, the largest firm mentioned,
were ranked based on methodology that focuses
on money, opportunity, work-life balance sup-
port and entrepreneurship, accountingweb.com
KPMG takes top position
in U.K . auditor rankings
KPMG is the leading auditor in the United King-
dom, according to new research by Adviser
Rankings. In the second quarter 2013 Corporate
Advisers Rankings Guide, KPMG overtook Price-
waterhouseCoopers in the ranking and moved
up to top position for having the most number of
U.K . quoted clients. However, PwC’s client base
remains more profitable and is larger by aggre-
gate market cap, Accountancy Age reported.
AICPA member survey shows
economic outlook optimism
An economic outlook survey by the American In-
stitute of CPAs showed that a growing number of
accountants believe the United States’ economy
is improving. Out of 1,185 respondents, 49 per-
cent were optimistic about the economy in the
second quarter of 2013, compared with 32 per-
cent in the first quarter. The survey also revealed
a lack of enthusiasm about hiring. Around 57
percent of those polled said their companies
have the right number of employees.
FRC may play role in ending audit
dominance in U.K. by Big Four firms
The Financial Reporting Council, which regulates accounting in the United
Kingdom, could be given the task of tackling a lack of competition between firms
that provide audit ser vices to FTSE 350 companies, a competition watchdog has
With the accounts of most large companies in the U.K . being checked by the Big
Four, the Competition Commission outlined in February potential remedies aimed
at ending the firms’ dominance of the large company audit market, and encourag-
ing competition from smaller firms such as BDO and Grant Thornton.
Suggestions included forcing companies to switch auditors and giving share-
holders more control of external audits.
The Competition Commission unveiled on 6 June that it was now enlisting the
help of the FRC to support some of its other measures. “ The further proposed rem-
edy we are considering is to give the FRC a secondary duty to promote competition
between firms providing audits to FTSE 350 companies,” the commission said in a
This secondary duty would require the FRC to consider how it might review and
report on audits of large companies in a way which promoted competition.
New accounting guidelines for
small U.S. businesses launched
“Game-changing” methods avoid complexity
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