The Small Business Financial and Regulatory Affairs Committee (SBFRC) met for the first time in March 2008 in Dallas, Texas. The IMA® (Institute of Management Accountants) Global Board of Directors and staff leadership had recognized an unmet need for a voice representing small businesses in the regulatory and standards-setting process. The financial professionals in attendance at that first meeting had been brought together to advocate on behalf of small businesses, privately held companies, and nonprofit organizations. The assembly of professionals, which I was a part of, included small business owners, executives from small and privately held companies, and many serving in executive capacities on charitable boards within their own communities.
During that first meeting, we discovered that describing our constituency might not be as easy as we anticipated. After several lengthy discussions, we decided to avoid a bright-line definition that relied on the number of employees or finance staff, total assets, or some other quantitative measure. Instead, we chose a more inclusive, relative definition that, as Nancy Forster-Holt described it, would help us “avoid arbitrarily closing the door on any business that could benefit from our advocacy.” (See her article, “What Makes a Business ‘Small’?” in the March 2009 Strategic Finance for more detail.) Many people may be surprised to find that they work in, work with, or have some other connection to one or many small businesses when you consider looking at size this way.
COMMITTEE STRUCTURE AND LEADERSHIP
The initial organization of the SBFRC was simple: Each member focused on an area of specialty, whether in operations, taxation issues, funding and investment, or other strategically relevant areas. Over the years, this project-by-project organization evolved into two subcommittees: the Emerging Issues subcommittee and the Research & Communications subcommittee. SBFRC members can belong to either or both subcommittees.
The Emerging Issues subcommittee monitors proposals for new or changes to current regulations or regulatory processes that could affect our constituency. It carefully studies the matter to form a position and then proposes an action or an advocatory position to the full committee.
The Research & Communications subcommittee researches current topics of interest in the accounting profession and prepares content for Strategic Finance. Like the Emerging Issues subcommittee, the Research & Communications subcommittee submits content for other SBFRC members to review before moving forward with submissions for publication.
PROFESSIONAL ADVOCACY ENGAGEMENT
The SBFRC has engaged a variety of topics from myriad sources and has written numerous comment letters to the Internal Revenue Service (IRS), the U.S. Department of Labor, the International Accounting Standards Board (IASB), the Financial Accounting Standards Board (FASB), the Small Business Administration (SBA), the U.S. Securities & Exchange Commission (SEC), and other regulatory and government agencies. Topics have included card payment issues, taxation, executive salaries, accounting standards and small business investments, taxpayer identification truncation, agenda consultations, transition guidance concerning intangibles, goodwill, and an overtime regulation proposal. The SBFRC has also delved into issues regarding healthcare entities and proposed regulations concerning nonprofits. We also worked directly with the AICPA (American Institute of Certified Public Accountants) on a financial framework for smaller and medium-sized companies.
In each of these areas, the SBFRC has taken a leadership role advocating for small businesses, privately held companies, and nonprofit organizations. The Committee has influenced the development of standards, interpretations, and other requirements by contributing comment letters (which can be found at http://bit.ly/2IrT79Y) and by reviewing pending legislation from domestic and international regulatory and legislative organizations. We’ve led the way to provide guidance to constituents in these areas, particularly in areas of financial reporting and related operational matters.
SBFRC members also contributed to the preparation of the updated Internal Control—Integrated Framework from the Committee of Sponsoring Organizations of the Treadway Commission (COSO) ad hoc committee, which included updated internal control methodologies and techniques for a data-driven, Big Data business culture.
RESEARCH AND COMMUNICATIONS
The Research & Communications subcommittee began writing a quarterly Small Business column for Strategic Finance in 2012. This year, we have increased it to six columns per year, so look for us on a bimonthly basis. The column focuses on issues related to finance and accounting that affect small businesses, with topics ranging from the impact of government regulations on small businesses to planning for your company’s future to the impact of faster payments to using checklists to help streamline operations and processes. While we set out to reach and help IMA members, we recently found out that our columns have an even broader reach, with at least one column having been cited in two doctoral dissertations.
Many members, leaders, and alumni of the SBFRC also have distinguished themselves within and beyond IMA, contributing to groups such as the FASB Small Business Advisory Committee, the FASB Private Company Council, the COSO Ad Hoc Refresh Committee, the Stuart Cameron McLeod Society, and others. The SBFRC serves not only IMA with distinction but the accounting profession itself by developing leaders within the small business community who advance ethical, professional, and business standards at an extremely high level.
From its humble beginnings, the SBFRC has become a leader in advocacy for small business, establishing itself as a primary and credible source of information in the areas of financial accounting and reporting. The SBFRC has contributed to the improvement of those in small business by sharing knowledge both in the advocacy area and in many operational areas of management accounting for the small business. As the Committee moves forward, we hope the continuing focus on improving its product, developing leaders, and remaining engaged with its mission will lead to even greater accomplishments.
If you’d like to share your thoughts with the SBFRC about an issue or regulation impacting the small business community, or, better yet, if you’re interested in getting involved by becoming a part of the SBFRC yourself, please contact Linda Devonish-Mills, IMA’s director of technical accounting activities and the staff liaison to the SBFRC, at email@example.com.