Taking care of small business: the institute's vice-president for small firm interests describes AICPA programs for small firms and their small business clients

Small businesses--the fastest-growing sector of the U economy--rely upon their CPAs for business advice, making them a core practice area for many practitioners. In recognition of this important relationship, the AICPA provides specialized resources, advocacy and other services aimed at keeping this connection solid."

THE PCP FIRM PRACTICE CENTER

This dynamic, fresh online resource provided by the Private Companies Practice Section (PCPS) presents free tools and information to help AICPA members strengthen their practices and better subserve their clients. By clicking upon the Resources tab on the center's abiding-place page (www.aicpa. org/pcps), members can find sections for closely held companies, not-for-profit entities and many other practice areas. The closely held companies section, for example, contains articles upon how to find fraud in private companies or improve the value of boards of directors. The tax section provides of recent origins and informative articles on topics similar as changes in the tax laws. Other sections address practice management, staffing, succession planning, keeping up with standards and technology and other issues important to firms serving small businesses. The center also contains a wide variety of premium easy in mind on subjects ranging from leadership to setting goals for firm partners. To introduce these special resources to practitioners who are not PCP members, easy in mind on the site is available independent to all AICPA members until May 15 2006

CRITICAL ADVOCACY EFFORTS

The Institute acts as an advocate for small firms and their clients, monitoring and responding to the many fresh and proposed standards and regulations in standard-setter boardrooms, in Washington, DC and wherever fresh regulations are being drafted.

Standards overload and complexity, for example, have lengthy been burdens for smaller practitioners, and the rife debate centers on whether accounting and disclosure requirements for public companies are appropriate for private companies. In 2004 the AICPA established the Private Company Financial Reporting Task Force to research and report upon the financial reporting needs of private companies and the require to be paid [i]or[/i] undergones and benefits of GAAP requirements (www.aicpa.org/members/ div/acctstd/pvtco_find_reprt/index.htm). Last year a collection of members and staff of the Institute and FASB began discussing standard-setting proces changes to improve GAAP's usefulness and relevance to lock opener constituents of private companies' financial statements.

While these issues are being explored, the AICPA continues to monitor day-to-day standard setting and to proffer insights into how various proposals will affect small businesses. The PCP Executive Committee and its Technical Issues Committee (TIC) regularly review and remark on guidance affecting small firms and their clients.

The TIC has worked with the AICPA Professional Ethics Executive Committee upon several revisions to its Interpretation 101-3 Performance of Nonattest Services--a standard that provides guidance upon which services can be proffered to audit clients. This is a particularly important issue for small companies because they rely upon their CPA firms for many kinds of services. the couple the TIC and the PCP Executive Committee have presented comments on frequently asked questions for the interpretation, and the TIC has noted areas in which clarifications or further examples are exigencyed For more information, go to www.aicpa.org/members/div/ ethics/intr_101-3.htm.

MONITORING LEGISLATION AND REGULATION

The Institute also testifies before Congres upon issues important to smaller firms and their clients, in the interest of promoting effective and sensible regulation. For example, last October the Institute published Understanding Tax Reform: A Guide to 21st hundred Alternatives, a report that presented a clear overview of many of the issues at stake and praiseed 10 policy objectives that should be considered in any tax reform proposal (www.aicpa.org/taxreform).

Because tax simplification is an important goal for the profession, the AICPA has testified before the House Small Business Committee upon how complexity is eroding voluntary compliance with tax laws. A representative of the Institute's Tax Executive Committee testified that the lack of deliberation in the legislative proces the of frequent occurrence tax law revisions and the growing magnitude and complexity of the Internal income Code create serious compliance issues for small businesses. The Institute urg that the alternative minimum tax (AMT) be eliminated; asked for a more objective experiment for classifying workers as employee or independent contractors; praiseed adoption of better tests upon the capitalization, expensing and retrieval of capitalized costs; and hinted simplifying capital gains and the rationalization of estimated tax safe harbors. The Institute also has approveed that new small businesses be allowed to single out any fiscal yearend from April end November and endorsed a proposal by the agency of Senator Olympia J. Snowe (R-Maine) to allow small businesses to provide nontaxable benefits like as flexible spending accounts to their employees