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Thomas Kelley, CPA, former vice president of the AICPA and now consultant on professional standards, has remained involved with the Accounting and Review Services Committee project on the assembly of financial statements for internal use only. Robert Israeloff, when chairman of the AICPA, had enlisted Kelley, then the most senior accounting and auditing officer at the AICPA, into service on the project to move it quickly off his agenda into a final pronouncement. But apparently, the fast track for standard setting is not that easy to stay on.

Recently, because of a complaint circulating the profession from Joseph F. O'Brien, a New Hampshire CPA, The CPA Journal obtained a summary prepared by Kelley of the over 500 comment letters received by the AICPA on the proposed statement. Kelley, in discussing O'Brien's complaint, said that ARSC is trying to balance all the comments to arrive at a solution that makes sense for the profession. According to Kelley, it will take some time for the committee to sort out the issues and decide which way to proceed.

O'Brien complained to the AICPA and to the offices of state CPA societies that Kelley, in tabulating the comments, had put an interpretive spin on them discounting the number in opposition to the proposal (saying there appears to be 86 "form" letters expressing a negative point of view). O'Brien also expressed concern that Kelley's table did not include all letters submitted (in particular, several from the Massachusetts society) and comments from the discussion on the proposal over the Accountants Forum on CompuServe.

Based upon material Kelley furnished to The CPA Journal, it does not appear that his summary of the comments should or would, in any way, influence the deliberations of the committee. It shows quite dramatically the division among the profession the proposal has created. A quote from Kelley's memo to the ARSC concisely pictures the problem.

The fact that sole practitioners (over 120) supported the exposure draft proposal by a two-to-one margin is also an important overall consideration, but that needs to be compared to the fact that responses were received from various committees and governing bodies of 25 state societies. Grouping the states together without trying to weight the authority behind the comment letters, would indicate six in favor, 14 opposed, and five uncertain. And not unexpected, the responses from large firms--not just Big Six, is uniformly negative.

The ARSC committee, no doubt, will consider the logic of the comments, not the mere numbers in continuing its deliberations.

Editors Note: Just before the publication deadline, it was learned that the ARSC did not act on the proposal at its February meeting. Instead it decided to find out, before proceeding, why those in favor of the proposal would find the recommendations helpful. *

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