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FASB posted on its Web site a compilation of all changes made through July 10, 2006, to the guidance in Accounting for Derivative Instruments and Hedging Activities, the bound codification commonly referred to as the Green Book and last issued in February 2004 ( www.fasb.org/derivatives/07-10-06_green_book_changes.pdf ).

The Public Company Accounting Oversight Board (PCAOB) issued Staff Audit Practice Alert no. 1, Matters Relating to Timing and Accounting for Options Grants, which advises auditors of emerging risks to consider during audits of financial statements or of internal controls over financial reporting ( www.pcaobus.org/news_and_events/ ). The alert was prompted when it became known that certain issuers had reported granting stock options to employees earlier than was true in order to improve the grants’ value to recipients.

The AICPA, the American Accounting Association and the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) have joined forces to launch a research initiative that will help standard setters and regulators better understand how users in countries around the world perceive the financial statement audit and the auditor’s report ( www.aicpa.org/download/news/2006/ ).

The AICPA Auditing Standards Board (ASB) and the IAASB issued a request for proposals in August soliciting academic research to identify and provide information about such perceptions with regard, specifically, to an unqualified auditor’s report ( www.aicpa.org/download/news/2006/AICPA_AAA_IAASB_RFP.pdf ). Proposals are due October 2, 2006. The ASB and IAASB will fund $10,000 to $20,000 for each project. Researchers, who will be required to submit a summary of their results by October 1, 2007, and a more detailed report to the two boards by January 7, 2008, will have the right to publish their findings.

Meanwhile the ASB has a project under way to consider whether the auditor’s report should be revised, and the IAASB recently completed a similar project. Information gleaned from the new research will be used as a basis for any future revisions to the auditor’s report.

The AICPA released conforming amendments to chapter 5, “Reporting on an Entity’s Internal Control Over Financial Reporting” (AT 501) of Statement on Standards for Attestation Engagements no. 10, Attestation Standards: Revision and Recodification. The changes bring AT 501 into conformity with corresponding aspects of Statement on Auditing Standards (SAS) no. 112, Communicating Internal Control Matters Identified in an Audit, which introduced terms, definitions and guidance on identifying and evaluating control deficiencies and communicating significant deficiencies and material weaknesses. To coincide with the effective date of SAS no. 112, the conforming changes are effective when the subject matter or assertion is as of—or for a period ending on or after—December 15, 2006, although earlier application is permitted ( www.aicpa.org/download/members/ ).

The SEC granted relief from a Sarbanes-Oxley Act section 404(b) auditor attestation requirement to foreign private issuers that are accelerated filers (but not large accelerated filers) that file their annual reports on forms 20-F or 40-F ( www.sec.gov/news/press/2006/2006-136.htm ). They will not have to comply with the section 404(b) requirement to provide an auditor’s attestation report on internal control over financial reporting in their annual reports until fiscal years ending on or after July 15, 2007. They need comply only with the requirement to include management’s report in the annual report filed for their first fiscal year ending on or after July 15, 2006. The extension became effective on September 14, 2006.

The SEC amended its rules requiring disclosure of executive and director compensation, related person transactions, director independence and other corporate governance matters and security ownership of officers and directors. Under the new provisions disclosure documents will report a single figure—representing total annual compensation—for each executive to whom they refer. These changes affect proxy statements and annual reports and registration statements, as well as the current reporting of compensation arrangements, and require that most of this disclosure be provided in plain English. More information on these provisions and their effective dates is available at www.sec.gov/news/press/2006/2006-123.htm .

The Federal Accounting Standards Advisory Board issued an exposure draft of a proposed Interpretation, “Items Held for Remanufacture” ( www.fasab.gov/pdffiles/edinterpretation.pdf ), that would provide guidance for the classification, valuation and reporting of items held for remanufacture prior to sale or issuance, such as items being inspected, disassembled, evaluated, cleaned, rebuilt, refurbished and restored to serviceable or technologically updated or upgraded condition. The proposed interpretation would not apply to stand-alone items, such as entire airplanes, ships, tanks, intercontinental ballistic missiles or other higher assemblies that function independently. It applies existing standards, including Statements of Federal Financial Accounting Standards nos. 3, 6 and 23, to items held for remanufacture. Comments are due October 16, 2006.

The Governmental Accounting Standards Board issued an implementation guidance Q&A on qualifying other postemployment benefits (OPEB) plan trusts and the responsibilities of those who play a significant role in the functions of an OPEB plan that includes such a trust, for purposes of accounting and financial reporting in accordance with GASB Statement nos. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions ( www.gasb.org/project_pages/opeb_staff_guidance.pdf ).

As the direct result of December 2005 talks between SEC Chairman Christopher Cox and Committee of European Securities Regulators (CESR) Chairman Arthur Docters van Leeuwen, the two groups in August published and implemented a joint work plan on the application by international companies of international financial reporting standards (IFRSs) in the United States and U.S. GAAP in the European Union ( www.sec.gov/news ). Such cooperation will promote the development of high-quality accounting standards, the high-quality and consistent application of IFRSs around the world, full consideration of international counterparts’ positions regarding application and enforcement and the avoidance of conflicting regulatory decisions on the application of IFRSs and U.S. GAAP. In addition the staff of the SEC and CESR will forge a closer dialogue on the modernization of information technology for financial reporting and disclosure and regulatory platforms for risk management.

The International Accounting Standards Board (IASB) also took steps to encourage consistent and rigorous application of IFRSs and to facilitate constituents’ input to the board’s agenda ( www.iasb.org ). Foremost among these actions was the IASB’s decision to give companies until January 1, 2009, to apply IFRSs under development or major amendments to existing standards. This will lengthen the time countries have to prepare for new standards and provide sufficient opportunity for them to comment on conceptual issues and for the IASB to hold public roundtable discussions on key topics.

The International Ethics Standards Board for Accountants, an independent standard-setting board within IFAC, revised the Code of Ethics for Professional Accountants by updating the definition of a network firm, which is required to be independent of an audit client of another firm within the network. The revised definition classifies firms as network firms if they belong to a larger structure that is aimed at cooperation and at profit- or cost-sharing, or that shares ownership, control or management; quality control policies and procedures; business strategy; a brand name; or a significant part of professional resources. The new provision is effective for assurance reports dated on or after December 31, 2008, and is available free at www.ifac.org/store/Category.tmpl?Category=Ethics .

Another IFAC body, the IAASB, approved A Guide for National Standard Setters That Adopt IAASB’s International Standards but Find It Necessary to Make Limited Modifications ( www.ifac.org/IAASB/downloads/modification_policy_position.pdf ). The nonauthoritative paper states the board’s position on the extent to which a national standard setter that adopts IAASB-issued international standards can modify them while still asserting its standards conform to their international counterparts.

On October 19 and November 16, 2006, the AICPA will offer free Infocasts presented by specialists who have authored titles in the Institute’s series of Management Accounting Guidelines (MAGs). Business Continuity Management will be the subject of the October 19 Infocast presented by author Eric Krell. The November 16 Infocast will feature Marc Epstein and Tamara Bekefi presenting an overview of their guideline, Integrating Social and Political Risk into Business Decisions. AICPA Vice-President of New Finance John Morrow will moderate each of these Web-based sessions. Each presentation will include a live question-and-answer session; CPE credit is available for a nominal fee, and a 50% discount is being offered on the corresponding MAGs. More information is available at www.cpa2biz.com .

AICPA President and CEO Barry C. Melancon and SEC Chairman Christopher Cox will be keynote speakers at the 14th International XBRL Conference & Exhibition in Philadelphia on December 4–6, 2006. “XBRL’s potency as a business tool is recognized worldwide,” Melancon said. “It facilitates the transmission and analysis of financial information and thus improves decision-making. The AICPA and XBRL-US welcome Chairman Cox, who is encouraging SEC registrants to participate in the commission’s voluntary XBRL filing program.”

Other speakers include International Federation of Accountants Chief Executive Ian Ball, CFA Institute President and CEO Jeffrey J. Diermeier, FASB Chairman Robert H. Herz, U.S. Department of Labor CFO Samuel Mok and IASB Chairman Sir David Tweedie. More information is available at www.xbrl.org .

Kathleen L. Casey was sworn in as the 88th SEC commissioner by Chairman Christopher Cox in July. She is a 13-year veteran of Capitol Hill, having served as legislative director and chief of staff for Senator Richard Shelby (R-AL) and staff director of the Senate Banking Committee’s Subcommittee on Financial Institutions and Regulatory Relief. She succeeds Cynthia A. Glassman.

The commission also appointed Zoe-Vanna Palmrose, CPA, PhD, its deputy chief accountant in August. She served on the AICPA Auditing Standards Board Fraud Task Force and the Institute’s Antifraud Program and Controls Task Force. Palmrose, who is the PricewaterhouseCoopers Professor of Auditing at the University of Southern California’s Leventhal School of Accounting and Marshall School of Business, replaces Andrew D. Bailey Jr.