TIC Airs Concerns about GASB's New Financial Reporting Model
The Technical Issues Committee (TIC) of the AICPA Private Companies Practice Section recently expressed concern with the GASB's proposed new accounting model for state and local governments. Specifically, TIC feels that some of the proposals will make these engagements, which are already complex and intricate, even more complicated and costly for practitioners and their government clients.
According to TIC, one of the most critical issues involves dual presentation. The GASB proposal, Government Financial Reporting Model: Core Financial Statements, suggests requiring that core financial statements be prepared from both an entity-wide perspective and a fund perspective. Many governments and public officials find it diffcult to understand the current financial reporting model and, in the TIC's opinion, the new dual perspective will not improve comprehension. At the same time, dual presentation could significantly increase costs for smaller governments because it would force auditors to perform additional procedures.
The proposal also sets minimum requirements for management discussion and analysis (MD&A) in government financial statements. Although the information included in MD&A can be worthwhile for users, TIC thinks the preparation of this report may prove burdensome and costly for many smaller governments. …