Not always to their liking, publicly traded companies have gotten nearly all the attention for most of the last decade on issues ranging from compliance practices to accounting standards. But who's there to guide the privately held ones, which in many cases still must follow GAAP to satisfy bank lending and other commitments?
Sensing a need, FASB and the AICPA last year created the Private Company Financial Reporting Committee (PCFRC). The mission of the PCFRC is to recommend changes to GAAP to help make private company compliance less costly and more useful. The 12-member committee, which includes preparers of private company financial statements and CPAs from small and regional auditing firms, reaches out to privately held companies and their associates to shape its agenda and recommendations to FASB. "The cost of complying with many [GAAP] standards is disproportionate for private companies that prepare GAAP-based financial statements and users of these statements sometimes do not find the information useful in their decision-making," says Judy O'Dell, a founding member and chair of the PCFRC.