NSA Develops Tax Accounting Standards For Small Business
The National Society of Accountants (NSA) has prepared an exposure draft on "Tax Accounting Standards for Small Business." NSA intends for the guidelines to be used by accountants who are involved with financial statements for small businesses.
NSA says the standards are based on the principles of accounting used in preparing federal income tax returns, (e.g., the Internal Revenue Code).
James H. Nolen, Chair of the NSA Accounting Standards Committee that drafted the standards, explains, "Small to medium sized businesses are the backbone of the U.S. economy. That's why we are excited that we are able to offer a new reporting alternative for accounting firms." He adds that the document is "short, readable and practical, making it user friendly and viable without sacrificing quality or burdening the practitioner with volumes of regulations."
The contents of the document overlap to some extent with the professional standards of the American Institute of CPAs. Applicable AICPA guidance can be found in Statement on Auditing Standard No. 62 and related interpretations, as well as the Statements on Standards for Accounting and Review Services (SSARs). AICPA also provides a practice aid on "Preparing and Reporting on Cash- and Tax-Basis Financial Statements."
NSA and its affiliates represent 30,000 members who provide accounting, auditing, tax preparation, financial and estate planning, and management services to approximately 19 million individuals and business clients. Most members are sole practitioners or partners in small to medium size accounting firms.
Download NSA's exposure draft. Comments are due by January 17, 2003.