Clarified Auditing Standards Learning and Implementation Plan
FRF for SMEsTM—Learning and Implementation Plan
Thisnon-GAAP accounting framework produces financial statements that deliver useful, relevant information to private business owners and other interested parties in a simplified, consistent, cost-effective way. The framework underscores the CPAs’ role as trusted advisers for America’s small business community.Use this roadmap to (1) understand the framework and its benefits, (2) help train your professional staff, and (3) communicate with your clients and their financial statement users proactively about your service offering. Note that thereare several tools and resources to support you in your journey.
Step / Action / Description/Considerations / Tools and Resources / Owner1 / Assign owner or task force to become an expert (and take the lead) on understanding and implementing the FRF for SMEsframework. / The FRF for SMEs accounting framework was developed toprovide a robust and reliable financial reporting option for private companies when GAAP is not needed.
Learning about the framework and being able to offer it as a reporting alternative to your small and medium size clients will position you at the front of the pack in serving this important business sector. / [A&A Partner, or A&A Manager or Technical Reviewer]
2 / Familiarize yourself with FRF for SMEs / Start by dowloading a free copy of the Framework.
Then check out the Introduction to FRF for SMEs to help you understand
- Why the framework was developed
- What types of entities might be interested in using theframework
- The basic concepts of the framework
- Financial Reporting Framework for Small- and Medium-Sized Entities
- AnIntroduction to the Financial Reporting Framework for Small- and Medium-Sized Entities
- Video explaining the framework and its important features
3 / Take a deeper look at the framework to gain an understanding of this non-GAAP accounting methodolgy. / The framework is concise and self-contained without excess narrative and prescriptive rules. The entire framework is approximately 200 pages. Generally, if a CPA knows the accrual basis of accounting and aspects of tax accounting, he or she should find the framework uncomplicated.
You can use the Introduction to FRF for SMEsfor a brief overview of each chapter in the framework and a look at sample reports.
The Comparison of FRF for SMEs to Other Bases of Accountinghighlights some of the significant differences from GAAP, Income Tax and IFRS-SMEs. The Ilustrative Financial Statements and the Illustrations of the Application of Certain Principles and Criteria will also help you further your knowledge of the framework.
The Framework and Implementation Resources publication offers insight in one convenient bundle. You’ll find:
- sample audit, compilation and review reports
- illustrations of principles and critieria on topics such as the initial application of the FRF for SMEs framework
- a presentation and disclosure checklist
- illustrative financial statements
- Financial Reporting Framework for Small-and Medium-Sized Entities
- An Introduction to the Financial Reporting Framework for Small- and Medium-Sized Entities
- Comparison of FRF for SMEs toOther Bases of Accounting
- Illustrative Financial Statements
- Illustrations of the Application of Certain Principles andCriteria
- Decision Tool for Adopting an Accounting Framework
- Self study course
4 / Apply what you have learned about the FRF for SMEs to your firm’s audit and attest methodology and guidance. / Incorporate FRF for SMEs sample reports, presentation and disclosure considerations into your firm guidance and methodology. / AICPA Resources
- Financial Reporting Framework for Small- and Medium-Sized Entities
- FRF for SMEs Presentation and Disclosure Checklists
- An Introduction tothe Financial Reporting Framework for Small- and Medium-Sized Entities (includessample reports on financial statements)
- Decision Tool for Adopting an Accounting Framework
5 / Facilitate training for your professional staff and partner group. / To begin implementing the FRF for SMEs as a service offering, inform, educate and train your staff.
Use the Staff Training PowerPoint templatealong with theIntroductionto FRF for SMEs and Comparison of FRF for SMEs to Other Bases of Accounting to facilitate an in-house training session on the framework. / AICPA FRF for SMEs Firm Toolkit
- An Introduction to the Financial Reporting Framework for Small- and Medium-Sized Entities
- Comparison of FRF for SMEsto Other Bases of Accounting
- Staff Training PowerPoint - powered by PCPS
- Decision Tool for Adopting an Accounting Framework
- Self study course
6 / Inform your clients about the framework and the benefits it may have for their financial reporting engagements. / Utilize the components of the FRF for SMEs toolkit designed specifically for use with clients or potential clients. Consider posting these documents on your website and using them in client presentations to position your practice as a leader in providing this service tailored to America’s small businesses.
Include the Newsletter/Website article template in your client-facing communications to introduce the framework and some of its benefits.
Personalize the CoverLetter and send it to the clients for whom the framework may be an appropriate reporting option.
The Introduction to FRF for SMEs for Private Company Owners/Managersis specifically tailored for you to present to your clients, along with the client-facing PowerPoint presentation.
Post the FRF for SME logo for firms on your website to promote your service offering. A short video is also available to post on your site.
Placing copies of the Backgrounder in your lobby is a good way spark conversations with clients.
Power up your online presence with social media blurbs to inform your client base and others of the service you’re providing. / AICPA FRF for SMEs Toolkit
- Newsletter/Websitearticle
- Cover Letter to clients
- For small firms
- For medium firms
- For largefirms
- Introduction to FRF for SMEs for Private Company Owners/Managers
- PowerPointPresentation
- Flyer to mail or hand out
- Logo for firm website or promotional materials/stationery
- Video
- Backgrounder
- Social Media blurbs
7 / Once you’ve determined which clients may be interested in usingthe FRF for SMEs, more in-depth conversations can be held to answer their questions and discuss transition timelines. / Clients may have questions about what will be different and what the transition to the framework will require. You can review the Illustrative Financial Statementsand Frequently Asked Questions and Comparison of FRF for SMEsto Other Bases of Accounting with them to address their questions. / AICPA PCPS FRF for SMEs Toolkit
- Illustrative Financial Statements
- Frequently Asked Questions for Private Companies
- Comparison of FRF for SMEs to Other Bases of Accounting
- Decision Tool for Adopting an Accounting Framework
8 / Communicate with bankers, surety companies and others in your community. / Bankers, surety companies and other financial statement usersthat receive financial statements prepared based on the FRF for SMEs will find relevant information they need to understand the company and its finances. By introducing the FRF for SMEs to these stakeholders, you can explain why the framework was developed and identify the benefits for them.
Consider using the PowerPoint Presentation, Backgrounderand Frequently Asked Questions to intoduce the FRF for SMEs to
- banks/credit untions
- surety companies
- civic or small business organizations
The Introduction to FRF for SMEs for Financial Statement Usersis tailored to this audience and can be a useful tool in gaining acceptance for the framework. The Comparison of FRF for SMEs to Other Bases of Accountingand Illustrative Financial Statements can foster more in-depth conversations. / AICPA FRF for SMEs Toolkit for Financial Statement Users
- Backgrounder
- PowerPoint Presentation
- Frequently Asked Questions for Financial Statement Users
- Introduction to FRF for SMEs for Financial Statement Users
- Comparison of FRF for SMEs to Other Bases of Accounting
DISCLAIMER:This publication has not been approved, disapproved or otherwise acted upon by any senior technical committees of, and does not represent an official position of, the American Institute of Certified Public Accountants. It is distributed with the understanding that the contributing authors and editors, and the publisher, are not rendering legal, accounting, or other professional services in this publication. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Copyright © 2017 by American Institute of Certified Public Accountants, Inc. New York, NY 10036-8775. All rights reserved. For information about the procedure for requesting permission to make copies of any part of this work, please email ith your request. Otherwise, requests should be written and mailed to the Permissions Department, AICPA, 220 Leigh Farm Road, Durham, NC 27707-8110.
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