IMA Technical Committees and Panels Are an Influential Voice: Through the Efforts of Its Technical Committees and Panels over the Past Year, IMA[R] Continues to Serve as a Strong Voice for Management Accountants regarding Such Issues as the Convergence of Accounting Standards, Small Businesses, XBRL, Internal Controls, and More
Devonish-Mills, Linda, Strategic Finance
Greetings from the world of Professional Advocacy! In my new role as IMA's director of market advocacy, I have the pleasure of working closely with all of IMA's technical committees and panels. The diversity of issues these groups addressed during 2011 was very impressive, and I think you'll agree once you've read their updates.
IMA's Financial Reporting Committee (FRC) has been working on important technical issues for approximately 25 years. Until recently, it was the only technical committee that expressed positions on behalf of IMA members regarding issues that have an impact on the management accounting profession. During the 2012 fiscal year, which ends June 30, 2012, the Committee is headed by Allan Cohen, controller at NBC Universal.
In November 2009, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) reaffirmed their commitment to their Memorandum of Understanding (MOU) to complete projects that would move toward the convergence of standards. Specifically, this plan includes possible adoption of International Financial Reporting Standards (IFRS) by U.S. companies. FRC members have been quite busy during the past few years monitoring and reviewing proposed guidance issued by both Boards.
The FRC has submitted influential letters to the U.S. Securities & Exchange Commission (SEC), the FASB, and the IASB about concerns related to the quality of proposed guidance issued under the convergence MOU. Currently, the Boards are focusing on finalizing guidance on four concepts that are considered critical to this project: revenue recognition, leasing, financial instruments, and investment companies.
On May 26, 2011, the SEC released a staff paper outlining condorsement, a possible method of incorporating IFRS into the financial reporting system of U.S. issuers. Condorsement would be a hybrid approach of endorsement and convergence on a standard-by-standard basis. During December 2011, the SEC announced that it will delay its eagerly anticipated decision for a few more months on whether or not to incorporate IFRS into the U.S. financial reporting system.
Do you believe the incorporation model being floated by the FASB and the SEC goes far enough to achieve convergence benefits? Do you agree with the SEC's seemingly "be deliberate" approach to get the convergence process right, or is it taking too long?
For many years, regulatory bodies have been focusing on issues that have had an impact on large public companies. Now these groups have recognized that small public and private companies also are impacted by technical issues that affect their financial reporting systems. This evolution encouraged IMA to develop its Small Business Financial and Regulatory Affairs Committee in 2008. During the 2012 fiscal year, the SBFRC has been headed by Irvin Andre Alexander, interim CFO for Special Olympics.
Under Andre's leadership, the SBFRC has taken the lead in addressing standards-setting procedures over financial reporting issues that impact private companies. This focus started in 2009 with the development of a Blue Ribbon Panel by the Financial Accounting Foundation (FAF), National Association of the State Boards of Accountancy (NASBA), and the American Institute of Certified Public Accountants (AICPA). IMA has an impressive track record of members being involved with influential groups that make critical decisions regarding the management accounting profession. IMA Global Board members Bill Knese and Hubert Glover were members of the Blue Ribbon Panel. Bill was a representative for IMA, and Hubert was a member at large.
On September 15, 2010, the SBFRC submitted a letter to the Blue Ribbon Panel, suggesting that U.S. Generally Accepted Accounting Principles (GAAP) be modified to incorporate exceptions for private companies and that an interim standards-setting group that can monitor such issues be established. …