TSCPA’s legislation clarifying that governmental entities in Texas would be required to issue financial reports that are in accordance with GAAP as established by the Governmental Accounting Standards Board passed the Texas Senate yesterday with a 31-0 vote.
In 2007, the Texas Legislature passed legislation permitting state and local governments to opt out of complying with GAAP as it relates to postemployment benefits.
TSCPA asserts that it is not in the public interest to allow accounting methods other than GAAP. Obligations for future benefits should be reported so the public understands the size and cost of the obligation.
Additionally, CPA/Auditors will not issue unqualified opinions on audited financial statements that are not in accordance with GAAP. Non-compliance with GAAP also has the potential to affect the bond ratings for governmental entities.
The companion bill, HB1930, is set on the Texas House Calendar, hopefully receiving a positive vote next week.
Thanks to Senator Perry and Representative Frullo for filing the bills and to TSCPA’s key persons for contacting their legislators encouraging their support.