The SEC released guidance to help registered companies improve the presentation of consolidated statements of cash flows in financial statements they file with the commission ( www.sec.gov/divisions/corpfin/guidance/ ). In a letter to CFOs, Chief Accountant Carol A. Stacey of the commission’s Division of Corporation Finance emphasized the importance of accurately presenting cash receipts and cash payments so financial statement users can better assess how able companies are to meet their financial obligations, pay dividends and otherwise operate as going concerns.

The AICPA Auditing Standards Board issued an exposure draft of proposed Statement on Auditing Standards (SAS), Defining Professional Requirements in Statements on Auditing Standards, and proposed Statement on Standards for Attestation Engagements (SSAE), Defining Professional Requirements in Statements on Standards for Attestation Engagements (www.aicpa.org/members/div/auditstd/2005_02_28_prof_req.asp). The suggested guidance defines terminology describing auditors’ and practitioners’ degrees of responsibility during engagements. The terms must and is required denote a requirement, while the term should denotes a presumptive requirement. The auditor or practitioner is required to comply with a requirement in all cases in which the circumstances exist to which the requirement applies. In rare circumstances, an auditor or practitioner may depart from a presumptive requirement if he or she documents the justification for departure and how alternative procedures performed were sufficient to achieve the objective of the presumptive requirement. The proposed statements will apply to existing SASs and SSAEs. Comments on them are due May 15, 2005.

The SEC issued an order extending until September 30, 2005, the date by which banks must comply with certain broker registration requirements of the Gramm-Leach-Bliley Act, which repealed a provision of the Securities Exchange Act of 1934 that had allowed such institutions to engage in securities activities without registering as brokers or dealers ( www.sec.gov/rules/exorders/34-51328.htm ). Meanwhile the commission will amend interim rules it adopted to aid full compliance with the narrower requirements.

The Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Office of the Comptroller of the Currency issued final joint guidance to help insured depository institutions address concerns federal and state bank regulators, consumers, financial institutions and their trade representatives have raised about overdraft protection programs ( www.federalreserve.gov/boarddocs/press/ ). The guidance focuses on how the institutions should address safety and soundness considerations, manage legal risks and apply best practices in administering such programs and offering them to consumers.

The SEC again extended the dates by which nonaccelerated filers and foreign private issuers must comply with amendments—adopted in keeping with the internal control and financial reporting provisions of section 404 of the Sarbanes-Oxley Act—to its rules under the Securities Act of 1934 ( www.sec.gov/rules/final/33-8545.htm ). Such entities must begin to satisfy these requirements for their first fiscal year ending on or after July 15, 2006.

The AICPA unveiled a Web site for CPAs interested in information technology ( www.aicpa.org/infotech ). It offers resources on system security and reliability; tools and checklists to help CPAs assess organizational practices pertaining to information privacy, e-commerce and similar subjects; and guidance on standards and regulations. In addition to the resources available to all visitors, the site contains special content accessible only by those CPAs who hold the Institute’s Certified Information Technology Professional (CITP) credential or belong to the IT Membership Section.

The International Accounting Standards Board (IASB) exposed a draft memorandum of understanding on the role of accounting standard setters and their relationships with the board ( www.iasb.org/uploaded_files/ ). The agreement identifies the responsibilities of the IASB and other standard setters to foster the adoption of, or convergence with, international financial reporting standards. Comments are due July 29, 2005.

The International Organization of Securities Commissions, the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the World Bank and the Financial Stability Forum established the Public Interest Oversight Board (PIOB) to oversee the International Federation of Accountants’ standard-setting activities relating to audit performance, auditor independence and ethics, audit quality control and assurance and education ( www.ifac.org/downloads/inauguration_of_PIOB.pdf ).

The Institute released Understanding Social Security Reform: The Issues and Alternatives, a comprehensive analysis by AICPA tax, accounting and economic specialists of the benefits and drawbacks of many current reform proposals. The report assesses the program’s financial condition; its importance to the elderly living in poverty; how reform could affect the redistribution of income and workers’ retirement plans; how to balance investment risk with the pursuit of higher returns; and the funding challenges reform might involve ( www.aicpa.org/members/socsec.htm ). “The Social Security system’s viability affects most Americans,” said Thomas P. Ochsenschlager, AICPA vice-president of taxation, “so it’s important to thoroughly analyze the issues before making any changes. Our study adds knowledge to the debate.”