Highlights


  

 
 

Eight states have introduced “no notification” legislation since early 2007 as part of an effort to implement a uniform approach to cross-state mobility through the concept of substantial equivalency. The legislation in Hawaii, Indiana, Maine, Missouri, Oklahoma, Rhode Island, Tennessee and Texas, if passed, would remove the notification requirement of Uniform Accountancy Act (UAA) section 23 and give the boards of accountancy in those states automatic jurisdiction over out-of-state CPAs who practice in their state. The legislation follows UAA amendments proposed by the AICPA and NASBA (see “Barriers to Mobility: A Crisis for Many CPAs,JofA, April 07, page 46). In addition, the AICPA established a Mobility Hotline at 800-839-2715 to answer questions and receive comments or concerns.

Leaders of the PCAOB and European Union launched an effort to achieve greater cooperation between the U.S. and EU auditor oversight bodies. In March, PCAOB Chairman Mark Olson and EU Commissioner Charlie McCreevy met in Washington to discuss steps toward collaboration, which is needed because of growing trans-Atlantic overlap of regulatory responsibilities, the PCAOB said. Of the more than 760 foreign audit firms registered with the PCAOB, about 265 are based in the EU. Some of those firms are subject to the PCAOB inspection requirements of Sarbanes-Oxley.

Correspondingly, many audit firms from outside the EU with operations there will be inspected by European regulators under a new EU directive. Olson and McCreevy, who is the EU’s commissioner for internal market and services, said in a PCAOB release that cooperation will save resources and reduce regulatory overlap, plus bolster international confidence in companies’ financial statements. The organizations set a goal of 2009 to achieve mutual reliance on inspections among regulatory agencies with independent and rigorous oversight systems. Olson said the PCAOB, in consultation with the EU and its member states, will develop policy guidance for relying on non-U.S. regulators.

The SEC signaled acceptance of IFRS will not be contingent on resolving all differences with U.S. GAAP.

“Virtually everyone—issuers, investors and stakeholders alike—agrees that the world’s cap markets would benefit from the widespread acceptance and use of high-quality global accounting standards,” SEC Chairman Christopher Cox said at a recent SEC roundtable on International Financial Reporting Standards (IFRS). Currently, foreign companies that cross-list their stock on U.S. exchanges are required by SEC rules to reconcile their financial statements to U.S. GAAP.

“The elimination of the present reconciliation requirement is not dependent upon the FASB and the IASB resolving all major differences between their regimes,” Cox said. The SEC’s road map to IFRS calls for the SEC to accept IFRS filings by 2009.

The Private Company Financial Reporting Committee (PCFRC) announced its founding membership. The PCFRC is part of a new initiative by FASB and the AICPA to better meet the financial reporting needs of private companies and the users of their financial statements. In addition to the previously announced chair, Judith O’Dell, the committee will consist of four CPA practitioners, four financial statement preparers and four users of private company financial statements. The founding members are:

Mary Ann Lawrence, senior vice president, Key Corp.
Carl Bagge, partner, Bagge, Cennamo & Co. LLP
David Lomax, area underwriting manager, Liberty Mutual Surety
Kathy Barry, CFO, Highland Capital Partners
Jerry Murphy, CFO, Todd and Sargent Inc.
Charles Bramley, partner, Briggs Bunting & Dougherty
Judd Rabb, vice president and CFO, Coldwatt Inc.
Daryl Buck, vice president and CFO, Reasor’s Inc.
Tom Ratcliffe, director of accounting and auditing, Wilson Price
Michael Cain, senior executive vice president, Frost Bank
Carisa Wisniewski, partner, Moss Adams LLP
H. Marco Kichler, controller, Putnam Precision Products Inc.

The Auditing Section of the American Accounting Association has launched an online journal to facilitate interaction with practitioners. Current Issues in Auditing seeks to advance the dialogue between academics and practitioners on current issues in auditing practice. Topics to be covered include new opportunities and challenges, emerging areas, global developments and the effects of new regulations or pronouncements and technological or market developments on audit processes. Auditing practice is broadly defined and includes issues in external and internal auditing, government auditing, IT auditing and assurance services.

The journal seeks short, well-written papers from academics, practitioners and regulators addressing timely issues facing the auditing practice community. Submission guidelines can be found at http://aaahq.org/pubs/EdPolicies/CIA_EdPolicy.pdf.

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