AICPA HITS BASELINE SHOT TO FASB

Under the leadership of Jerry J. Weygandt, the AICPA financial reporting committee has the charge of monitoring the implementation of the AICPA Special Committee on Financial Reporting (Jenkins committee) recommendations. The report of the Jenkins committee called for a new business reporting model that would include nonfinancial and forward looking information. In October 1996, the AICPA brought together representatives from a number of organizations that have an interest in the project (FASB, FEI, AIMR, IMA, and SEC) for a symposium to discuss the issues and address implementation. A report on that symposium appeared in the January issue of The CPA Journal (News & Views). The wrap-up paragraph in that report gave The CPA Journal editor's impression that, while most participants agreed that nonfinancial and forward looking information is essential to capital markets, there was no clear indication as to how and who would move the project forward. The SEC showed no interest in taking charge and FASB received no encouragement from the preparer and investment community as indicated in responses to its invitation to comment on disclosure effectiveness.

The February issue of The Journal of Accountancy presents an article by professor Weygandt and AICPA staffer Daniel J. Noll that speaks of the symposium and the next steps that need to be taken. They concluded "practically all symposium participants favored forming a coalition to develop best reporting practices on an industry basis." In talking about the next steps, Weygandt and Noll state: "Because it has the resources, we believe that the private sector--namely the FASB--should be the leader." FASB vice chairman James J. Leisenring, who attended the symposium, told The CPA Journal that he felt that developing a framework for the presentation of expanded business reporting is something the FASB could quite logically take on. But there would have to be support throughout the financial reporting committee, support which he is not sure presently exists. "Nobody has demonstrated that the expanded information is not useful. But there appears to be little interest on the part of users to move the project forward," said Leisenring.

John J. Perrell, III, CPA, vice president financial standards and policy for American Express Company, who led the panel of preparers at the symposium, says that he saw no groundswell at the symposium for FASB to lead the project. "The last thing we need is more rule making. That doesn't mean that FASB can't be the catalyst to have something happen." Perrell's idea would be for ad hoc industry groups of preparers, users, and auditors to develop industry best practices, which individual companies would be free to adopt based upon the value they perceived them be in the marketplace. *