Chair's corner.

• Author: Castellano, James G.
• Position: American Institute of Certified Public Accountants - Brief Article

In our congressional testimony, we said the AICPA will support meaningful and appropriate reforms, and will continue to be both an advocate and a catalyst for necessary change. As I reported in my column last month, a significant change we support is a modernized financial reporting process that will help investors make better informed investment decisions and will increase confidence in our capital markets, our nation's financial reporting system and in our profession.

The AICPA is investing heavily in the development of new assurance and advisory services and tools to position CPAs to meet the changing needs of information users. Innovations like Performance View and SysTrust are the foundation upon which new models of such services will be built. Let's review them.

The historical financial statement is a look back. It reports financial history, and very well. But investors, creditors and management are seeking more information to help them determine where a company is headed in the future. The AICPA has long advocated for disclosure of non-financial data, including performance measurements and more forward-looking information to satisfy these unmet needs.

Performance View is a service in which CPAs identify the critical success factors leading to measures that can be tracked over time. It is a system that merges the standard financial measures with leading indicators. Examples of performance measures are numerous and can include:

* Revenue and gross margin from new products.

* Percentage of revenues from new customers.

* Market share.

* Customer satisfaction.

* Customer retention.

* Growth of business with existing customers.

The AICPA has developed Performance View services to enable CPAs to offer performance measurement advice to companies and employers, and, once more companies have adopted performance measurement systems and are using the information for external purposes, assurance on the reliability of the information reported from the organization's performance measurement system. Note I said many companies (large and small) do not have performance measurement systems in place. This presents a great opportunity for CPAs to provide value-added service to these companies by helping them to identify their relevant performance measures and helping them to design and...