The task force based its conclusions on input from more than 3,700 business owners, public accounting practitioners, financial managers, lenders, investors and sureties.

The task force, led by former AICPA chair James Castellano, began work in early 2004 in response to concerns expressed by interested parties about the relevance, benefits, and related cost of certain financial reporting requirements for privately held, for-profit entities.  These private companies represent over 99 percent of the nation’s incorporated businesses. 

"This group did not approach its research with a preconceived notion that issues or problems with GAAP financial reporting for private companies existed," said Castellano. "We wanted to understand if what many of us had been hearing was simply the opinion of a vocal minority or the true expression of concerns by stakeholders of private company financial reporting.”
 
The research was conducted for the task force by The MSR Group, an independent market research firm. The study included the use of focus groups, a stratified random sample telephone survey and an open, on-line poll.  Each phase of the research included participants from the key constituents of private company financial reporting.

"Overall, the survey respondents rated the value of GAAP financial statements of private companies quite highly on consistency, providing comparability among companies, and on their use as a tool in credit and investment decisions," said Castellano. "However, through our discussions, focus groups, and research, we learned that constituents rated certain GAAP requirements as providing relatively low relevance and decision usefulness to constituents of private company financial reporting."

Barry Melancon, AICPA President and CEO, said, "We are happy to say that the AICPA Board of Directors (subject to input from its Governing Council), the Financial Accounting Foundation (FAF) and Financial Accounting Standards Board (FASB) have agreed to work further to collaboratively explore an appropriate course of action to improve the usefulness of private company reporting."

The AICPA, FAF and FASB agree that any proposed changes that might result from this effort would need to be fully exposed for public comment and debate.

A complete copy of the task force report can be found at:
(http://www.aicpa.org/members/div/acctstd/pvtco_fincl_reprt/index.htm) 

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