A Voice for Small Businesses: IMA[R] Formed the Small Business Financial and Regulatory Affairs Committee (SBFRC) to Help Give Smaller Businesses and Private Enterprises Stronger Influence on the Issues That Impact Them and Greater Participation in the Standards-Setting Process
Alexander, Andre, Strategic Finance
How many of you in small businesses and privately held companies have felt overwhelmed and overburdened by regulatory and financial disclosures? Have you wondered who helped shape these policies and why? How many times have you asked yourself if all of the disclosures required by U.S. Generally Accepted Accounting Principles (GAAP) are really necessary?
The U.S. accounting standards-setting entities and regulatory bodies have historically focused on the external reporting needs of publicly traded companies. But publicly held enterprises represent only a small percentage of the total business enterprises in the United States. The standards have been promulgated with little input from smaller businesses and privately held companies.
Too often, CFOs of smaller enterprises learn about new regulations or accounting standards when their auditors arrive to conduct their annual audit. Sound familiar? You and your finance team are often too busy running the business to actively participate in the regulatory and standards-setting process. Who has time to respond to an exposure draft when your controller just quit and your company just lost its largest client?
For those in privately held companies, the disclosure requirements, in many instances, are simply unnecessary or too costly. Your investors and bankers are generally closely connected to the enterprise and can readily obtain the information they need to make decisions. You choose not to comply with all of the standards and instead elect to have a GAAP exception noted in your financial statements. But how many exceptions will result in non-GAAP financial statements?
In response to these problems, IMA[R] formed the Small Business Financial and Regulatory Affairs Committee (SBFRC) to give its members working in small businesses and privately held companies an opportunity to speak directly with standards-setting and regulatory bodies and participate in the standards-setting process. While IMA's Financial Reporting Committee (FRC) has been active in regulatory advocacy for more than 25 years, its membership, which includes representatives from some of the largest companies and accounting firms in the world, doesn't represent the views of small to medium-sized enterprises or privately held companies. Together, these two committees serve as a voice on accounting standards and regulatory compliance for the management accounting profession. …