Much of the earnings drop at FDIC-insured commercial banks and savings institutions was attributed to a jump in loanloss provisions, which increased from $9.2 billion in the first quarter of 2007 to $37.1 billion in the first quarter of 2008. The FDIC’s “Problem List” grew from 76 to 90 institutions in the first quarter. Total assets of problem institutions grew from $22.2 billion to $26.3 billion.

The report is available at www.fdic.gov .

Record provisions for loan losses contributed to combined losses of $617 million for the nation’s thrifts in the first quarter of 2008, according to the Office of Thrift Supervision. This was an improvement from an $8.75 billion loss in the fourth quarter of 2007, but was down from net income of $3.61 billion in the first quarter of 2007. Loan-loss provisions were a record $7.6 billion in the first quarter and a combined $16.6 billion in the past three quarters.

OTS Director John Reich said he has “been urging managers of OTS-regulated thrift institutions to be aggressive in setting aside provisions for expected loan losses. This forceful response to the housing market crisis continues to depress industry earnings, but it also strengthens institutions to withstand future challenges.”

Mortgage originations were down 20% from the fourth quarter and 21% compared with the year-ago period. Delinquencies also continued to increase compared with both prior periods.

The full report, with highlights and charts, is available at www.ots.treas.gov/docs/7/778020.html .

The FBI said its 1,204 pending mortgage fraud cases resulted in 321 indictments, 206 convictions, $595.9 million in restitution orders, and $21.8 million in recoveries in 2007.

The Bureau’s Financial Crimes Report to the Public, Fiscal Year 2007 said 80% of all reported mortgage fraud losses involved collusion or collaboration by industry insiders. The FBI says the true level of mortgage fraud is probably unknown because of a lack of mandatory reporting in much of the industry. In addition, the repackaging and sale of mortgages on the secondary market can conceal and distort the fraud, causing it to go unreported.

Among other statistics in the report:

The FBI pursued 529 corporate fraud cases, several of which involve losses to public investors that individually exceed $1 billion.

FBI securities and commodities fraud cases increased to 1,217 in 2007 from 937 in 2003, and resulted in $24 million in recoveries, $1.7 billion in restitution orders, and $202.7 million in fines in 2007.

The FBI investigated 548 money laundering cases, resulting in 141 indictments, 112 convictions, $66.9 million in restitution orders, $2.2 million in recoveries, and $11.4 million in fines.

The report is available at www.fbi.gov/publications/financial/fcs_report2007/financial_crime_2007.htm .

Suspicious Activity Reports related to mortgage fraud grew 42% in 2007, according to The SAR Activity Review—By the Numbers, Issue 10 , compiled by the Financial Crimes Enforcement Network. Although growth of SARs related to mortgage fraud was off from the peak growth of 93% in 2004, reports have increased more than 40% in each of the last three years.

FinCEN reported a 7% drop in reported instances of terrorist financing in 2007. This area has been trending down since 2004.

Growth of SARs from money services businesses slowed to 17% in 2007, down from 41% in 2004 and 29% in both 2005 and 2006. The U.S. Postal Service, which accounted for 24% of all reports from money services businesses, saw a 102% spike in total reports in 2007. Money orders constituted 40% of all SARs by money services businesses. The Postal Service issues more than 500,000 money orders daily.

The report is available at www.fincen.gov .

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) released an exposure draft, Guidance on Monitoring Internal Control Systems . Developed by COSO through a process led by a Grant Thornton LLP team, the guidance is designed to help organizations monitor the quality of their internal control systems.

“This guidance more fully develops the monitoring component of our Internal Control—Integrated Framework ,” COSO Chairman Larry Rittenberg said in a press release. The draft includes practical application guidance and case studies, as well as clarification of the concept of monitoring internal control.

Information about the draft is available at www.coso.org/guidance.htm . Comments are due by Aug. 15. Input from respondents will be used to develop the final release of the project, which is scheduled for the fall.

The SEC signed protocols to share information on the application of IFRS with financial regulators in four European countries. The arrangements with regulators in Belgium, Bulgaria, Norway and Portugal are in line with the plan previously agreed to between the SEC and the Committee of European Securities Regulators (CESR). These protocols join the growing list of arrangements for regulatory, enforcement and supervisory cooperation between the SEC and its foreign counterparts. For more information, visit www.sec.gov/news/press/2008/2008-95.htm .

The International Federation of Accountants (IFAC) Professional Accountants in Business (PAIB) Committee released new guidance on the use of discounted cash flow analysis and net present value in evaluating investments. Titled Project Appraisal Using Discounted Cash Flow , the guidance was released as part of the PAIB Committee’s new program to develop international good practice guidance on financial and management accounting topics. The document can be downloaded free from www.ifac.org/store . The PAIB Committee welcomes feedback, which can be e-mailed to stathisgould@ifac.org .

The International Ethics Standards Board for Accountants (IESBA), an independent standard-setting board within IFAC, has issued a re-exposure draft of proposals to strengthen two areas of the independence requirements contained in the IFAC Code of Ethics for Professional Accountants . The proposals relate to the provision of internal audit services to an audit client that is a public interest entity and the safeguards required when the fees from a public interest entity audit client exceed 15% of the total fees of the firm.

The original exposure draft was issued in July 2007. The re-exposure draft contains two key proposals. The first would prohibit independent auditors from providing internal audit services related to internal controls, financial systems or financial statements to an audit client that is a public interest entity, thereby further strengthening their objectivity in carrying out audits.

The second proposal requires that an annual pre- or post-issuance review be conducted by a professional accountant who is not a member of the firm when the revenues from a public interest entity audit client exceed 15% of total firm revenue for two consecutive years. Comments on the new ED are due by Aug. 31, 2008. The draft can be seen at www.ifac.org/EDs

The International Accounting Standards Board (IASB) issued amendments to IFRS 1, First-time Adoption of International Financial Reporting Standards , and IAS 27 , Consolidated and Separate Financial Statements , that respond to constituents’ concerns that retrospectively determining cost and applying the cost method in accordance with IAS 27 on first-time adoption of IFRS cannot, in some circumstances, be achieved without undue cost or effort.

The amendments address that issue by allowing first-time adopters to use a deemed cost of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements; and by removing the definition of the cost method from IAS 27 and replacing it with a requirement to present dividends as income in the separate financial statements of the investor.

The amendments to IAS 27 also respond to queries regarding the initial measurement of cost in the separate financial statements of a new parent formed as the result of a specific type of reorganization. The amendments require the new parent to measure the cost of its investment in the previous parent at the carrying amount of its share of the equity items of the previous parent at the reorganization date. The amendments to IFRS 1 and IAS 27 will apply for annual periods beginning on or after Jan. 1, 2009, with earlier application permitted. For further information on the amendments to IFRS 1 and IAS 27, see the project Web pages at www.iasb.org .

A new AICPA specialty credential in forensic accounting will be launched in early fall. The credential, Certified in Financial Forensics (CFF), combines specialized forensic accounting expertise with the core knowledge and skills that make CPAs among the most trusted business advisers, according to Robert Harris, chair of the National Accreditation Commission. “We anticipate the Certified in Financial Forensics credential will further strengthen the CPA’s role in a rapidly growing service area,” he said.

The CFF will encompass fundamental and specialized forensic accounting skills that CPA practitioners apply in a variety of service areas, including:

Bankruptcy and insolvency

Computer forensics

Economic damages

Family law

Fraud investigations

Litigation support

Stakeholder disputes

Valuations

To qualify, a CPA must be an AICPA member in good standing, have at least five years experience in practicing accounting, and meet minimum requirements in relevant business experience and continuing professional education. For information, visit www.aicpa.org/fvs .

The Professional Ethics Executive Committee (PEEC) of the AICPA adopted a new ethics requirement regarding indemnification and limitation of liability provisions.

Regulators, including the SEC, state insurance commissions and federal banking agencies, prohibit organizations under their jurisdiction from entering into certain types of indemnification and limitation of liability provisions in agreements for the performance of audit or other attest services. The new interpretation by the PEEC prohibits AICPA members from using their provisions when contracting for audit and other attest services if their employer or client is subject to the requirements of one of these regulators.

“The purpose of this standard is to remind practitioners of their responsibility to comply with regulators,” said Susan Coffey, AICPA vice president–member quality and state regulation. “Current AICPA standards allow certain indemnification and limitation of liability provisions to be included in agreements for audit and attest services. However, in cases where a regulator’s requirements are more restrictive than AICPA standards, our members must comply with the more restrictive standard.”

Failure to comply with a regulator’s requirements on the use of indemnification and limitation of liability provisions will be considered an act discreditable to the profession. The standard is effective July 31 and may be downloaded at www.aicpa.org/download/ethics/EDITED_Adopted_501_8_final.pdf .

The Financial Accounting Foundation (FAF) Board of Trustees named Teresa S. Polley president and COO. Polley joined FASB in 1987 as a technical associate and, among other positions, served as executive director of advisory groups for the organization. She had been interim COO for several months.

“We are delighted to recognize Terri’s impressive leadership in naming her as president and COO of the FAF,” Robert E. Denham, FAF chairman, said in a news release. “For 20 years Terri has served the organization in a variety of roles, adding value to everything she has touched. Terri’s vision and passion for excellence is the right prescription for the challenges we face.”

Michigan and South Carolina have passed full Uniform Accountancy Act (UAA) mobility provisions, bringing the number of states with such provisions to 25. Mobility legislation that would make New Jersey UAA-compliant awaits the governor’s signature.

The following are UAA-compliant states: Colorado, Connecticut, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Mexico, Ohio, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia and Wisconsin.

For up-to-date information on mobility and downloadable resource materials, go to www.aicpa.org/Legislative+Activities+and+state+licensing+Issues/Mobility+and+State+ Licensing+Issues .