Special feature: the year in review.

• Position: Private companies's guidance

As a professional organization, the AICPA has two critical goals: to help CPAs live up to their time-honored commitment to the public interest, and to provide timely, effective solutions to the challenges CPAs face in maintaining their competencies and leading role in American business and finance. This column highlights some of the many ways the AICPA has met these obligations this past year.

Addressing Private Company/Small Firm Issues

* Private companies represent over 99% of the nation's incorporated businesses. Early last year, 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, the AICPA Private Company Financial Reporting Task Force began a comprehensive research effort. In May 2005, the AICPA governing Council approved the task force's recommendation for the profession to work with the Financial Accounting Standards Board to evaluate potential changes to generally accepted accounting principles for this business sector (www.aicpa.org/members/div/acctstd/pvtco_fincl_reprt/dow nload/Report_Draft_Final.pdf).

* More than 45,000 accounting firms which are members of the AICPA have clients that are privately held companies. Often they are smaller businesses that have special needs, and the CPAs serving them need targeted information. The Private Companies Practice Section works as a community for these firms, recently launching the PCPS Firm Practice Center (www.aicpa.org/pcps) to provide valuable up-to-the-minute news and information and practical resources for firms.

* Firms find value in comparing their practices and management objectives with other, similar firms. To help these firms compare themselves in the marketplace, the PCPS teams with the Texas Society of CPAs in a survey that gleans details on best practices among small firms. Topics covered include insights into the economic climate, the largest sources of income for the average firm, top specialty areas, most popular marketing practices, average earnings and rates, the prevalence of retirement plans, human resources policies and outsourcing approaches, among other data (www.aicpa.org/pcps).

* Demonstrating the AICPA's response to small firm needs, the Institute's Web site (www.aicpa.org) features a new Small Firm Corner, which provides regular updates from Vice-President--Small Firm Interests Jim Metzler on initiatives, advocacy efforts and new resources.

Serving the Public Interest

* In the fierce debate on Social Security, the AICPA and the profession emerged as a voice of independent analysis. The Institute updated its study, Understanding Social Security Reform: The Issues and Alternatives, to foster informed discussion by providing unbiased facts and examination (www.aicpa.org/members/socsec.htm).

* The AICPA strives to provide policymakers and the public with a clear understanding of the issues and alternatives involved in federal tax reform. Most recently, the Institute updated its 1995 study, Flat Taxes and Consumption Taxes: A Guide to the Debate. The preliminary report, which offers criteria for analyzing reform proposals and discusses the differences between income and consumption taxation, was submitted to the President's Advisory Panel on Federal Tax Reform (www.aicpa.org/taxreform). The final report also will evaluate the Panel's recommendations--due to President Bush by July 31.

* As a leader in exploring rationality in tax policy, the AICPA recommended to the IRS Oversight Board that the agency's top three administrative goals should be improving taxpayer service, enhancing enforcement of the tax law and modernizing the IRS through its people, processes and technology. The comment letter can be found by going to www.cpa2biz.com/tax and clicking...