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A joint task force of the AICPA Employee Benefit Plan Audit Quality Center (EBPAQC) Executive Committee and the Employee Benefit Plan, Not-for-Profit and Health Care expert panels has developed resources to help auditors prepare for new requirements related to 403(b) retirement plans.

Beginning with 2009 Form 5500 filings, employee benefit plans under section 403(b) of the Internal Revenue Code that are sponsored by charitable organizations and covered under the Employee Retirement Income Security Act of 1974 will be subject to the same reporting and audit requirements as 401(k) plans.

Many plans face significant challenges in establishing plan accounting records and proper controls, identifying all participant accounts to be included as plan assets, determining beginning account balances (that is, comparative balances are also required as of Dec. 31, 2008, for calendar year plans), obtaining other financial information to be included in the plan’s financial statements, and obtaining an unqualified opinion on the plan’s financial statements from the independent auditor. The task force’s resources are available at

The majority of banks tightened underwriting standards for commercial and retail loans in the past year, following four straight years of easing underwriting standards, according to the Survey of Credit Underwriting Practices, 2008 , published by the Office of the Comptroller of the Currency. Examiners also reported increased risk in both categories of loans in the past year, and they expect the consequences of past relaxed standards, combined with general economic weakness, to contribute to increased risk and losses over the next year.

The survey assessed the underwriting standards of 62 banks that had loans totaling $3.7 trillion, which is approximately 83% of total loans in the national banking system.

Overall, 52% of institutions tightened underwriting standards for commercial products for the 12-month period ending March 31, 2008. Only 6% of institutions eased standards, and 42% left them unchanged. In 2005, 2006 and 2007, respectively, only 12%, 6% and 16% of institutions tightened standards, while 34%, 31% and 26% eased. In the past year in the retail sector, which includes home mortgages, home equity loans and credit card portfolios, 68% of lenders tightened underwriting standards, 32% left standards unchanged and none eased. This was also a sharp reversal from the previous three years, in which only 10%, 7% and 13% of institutions, respectively, tightened standards.

The complete OCC survey is available at .

The FDIC Deposit Insurance Fund balance grew 1% to $52.843 billion in the first quarter of 2008, according to the CFO Report to the Board . The fund’s earnings in coming quarters, however, are likely to come under pressure as it accounts for the collapse of IndyMac Bank. The FDIC became receiver of the $32 billion institution in July and estimates the collapse could cost the DIF as much as $8 billion to cover losses on insured deposits.

The CFO Report said the DIF earned $430 million in the first quarter, a 26% decline from the year-ago period. Two bank failures in the quarter had only a “nominal” effect on comprehensive income.

The fund’s provision for losses in the quarter was $525 million. This consisted of $458 million in estimated losses for future failures and a $67 million upward adjustment to estimated losses from prior-year failures.

The complete report is available at .

To mark the 75th anniversary of the establishment of the FDIC, Chairman Sheila Bair is heading the agency’s Face Your Finances road show. Bair met with community leaders in Chicago and San Francisco in July and plans stops in Dallas and Kansas City, Mo., in September.

The discussions address topics including deposit insurance, what it means to be an FDIC-insured institution, the costs and benefits of banking services, and consumer protections resulting from federal regulation of the banking industry. Panel discussions will also address bank services as they relate to building assets and accessing mainstream credit services, including mortgage loans. The discussions are intended to gather information that can be used in financial literacy initiatives and information materials.

The Face Your Finances tour will visit Dallas on Sept. 10 and Kansas City on Sept. 11. More information is available at .

FASB issued FASB Staff Position no. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities .

The guidance applies to the calculation of earnings per share under FASB Statement no. 128, Earnings per Share , for share-based payment awards with rights to dividends or dividend equivalents. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities, according to the FSP, and should be included when computing EPS following the two-class method.

The FSP is effective for financial statements issued for fiscal years beginning after Dec. 15, 2008, and interim periods within those years. All prior-period EPS data should be adjusted retrospectively (including interim financial statements, summaries of earnings and selected financial data) to conform to the provisions. Early application is prohibited.

The FSP is available at .

FASB issued a draft abstract of EITF Issue no. 08-5, Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement .

The draft addresses an issuer’s unit of accounting for debt issued with an inseparable third-party credit enhancement measured or disclosed at fair value. It states that the issuer of such debt should not include the effect of the credit enhancement in the fair value measurement of the liability. The unit of accounting for the debt does not include the third-party credit enhancement, according to the draft. The credit enhancement is obtained for the benefit of the investor and does not represent an asset of the issuer. Issuers should disclose the existence of a thirdparty credit enhancement on its issued debt.

The exposure draft is available at .

SEC Chairman Christopher Cox announced an initiative to examine fundamental questions about the way the SEC acquires information from public companies, mutual funds, brokers and other regulated entities, and the way it makes that information available to investors and the markets.

The first phase of the study, called the 21st Century Disclosure Initiative, will involve preparing, by the end of this year, a blueprint for future SEC action to improve the usefulness and timeliness of disclosure for investors, and to streamline and modernize the collection of disclosure from companies and regulated entities. The study will be a fundamental rethinking of financial disclosure, beginning with the basic purposes of disclosure from the perspective of investors and markets.

The study will include a review of all existing SEC forms and reporting requirements, as well as the manner in which information is provided to the SEC, with a special focus on needless redundancy. It will also include consideration of various alternative strategic approaches to acquiring and publishing disclosure information. The study also will consider ways that regulatory requirements for the collection of information might be tailored to get the best real-time distribution of financial and narrative disclosure to investors.

For more information, visit .

The FBI’s Operation Malicious Mortgage culminated in mid-June with 60 arrests in mortgage-related cases. The operation, which was conducted between March 1 and June 18, resulted in charges against 406 defendants in 144 mortgage fraud cases. The Bureau says approximately $1 billion in losses were caused by the alleged schemes employed in these cases.

Among those charged were two senior managers of failed Bear Stearns hedge funds who were indicted on charges including conspiracy, securities fraud and wire fraud for allegedly misrepresenting the funds’ conditions while they were at risk of collapse.

The operation was a joint effort by the FBI and other federal government agencies. Complete details are available at .

GASB issued Statement no. 53, Accounting and Financial Reporting for Derivative Instruments , for periods beginning after June 15, 2009, (early application is encouraged). Statement no. 53 gives financial statement users information to evaluate the inherent risks that derivative instruments can potentially pose to the financial health of governments, and to obtain a better understanding of the nature of these transactions, including how their value and cash flows change over time.

Derivative instruments can help state and local governments manage their exposure to economic risks, lowering borrowing costs, and generating income. They also may expose a government to significant risks and require special expertise and ongoing monitoring.

Statement no. 53 requires governments to measure most derivative instruments at fair value as assets or liabilities in their accrual-based governmentwide, proprietary fund, and fiduciary fund financial statements (but not in the governmental fund financial statements). Derivative instruments must be reported on the face of the financial statements of state and local governments, making these arrangements more consistent and transparent for users of governmental financial statements.

Statement no. 53 also improves disclosures, providing a summary of the government’s derivative instrument activity, its objectives for entering into derivative instruments, and their significant terms and risks.

More information about Statement no. 53—including a question-and-answer document, fact sheet, and plain language article—is available at .

The International Federation of Accountants (IFAC) Professional Accountants in Business (PAIB) Committee released two proposed International Good Practice Guidance documents for public comment. The proposed guidance addresses evaluating and improving governance structures and use of costing to support effective decision making.

Governance. The newly released exposure draft, Evaluating and Improving Governance in Organizations , sets out a framework, a series of fundamental principles, practical guidance, and references on how to evaluate and improve governance in organizations. The purpose of this guidance is to assist professional accountants and their organizations in creating a balance between conformance with rules and regulations and organizational performance.

Costing. The second proposed International Good Practice Guidance document, Costing to Drive Organizational Performance, is designed to assist professional accountants in business in delivering useful cost information to support effective decision making and organizational performance. The proposed guidance sets out eight fundamental principles of costing that encourage a performancebased view of costing to help professional accountants in business to ensure that costing information supports forward-looking strategic and operational decisions.

Comments on both documents are due by Sept. 23. The documents are available at .

The International Accounting Education Standards Board (IAESB), an independent standard-setting board within IFAC, released an information paper to assist IFAC member bodies and other stakeholders in developing effective continuing professional development (CPD) programs for professional accountants. Titled Approaches to Continuing Professional Development (CPD) Measurement , the paper explains the elements of an effective CPD program, examines current practices by accountancy and other professional associations and discusses approaches to measure a program’s effectiveness. The free information paper can be downloaded at the IFAC online bookstore at . For more information on the IAESB’s work, visit its home page at .

The Small Business Administration introduced two free online finance courses to help small business owners with the basic principles of finance and borrowing.

Finance Primer: A Guide to SBA’s Loan Guaranty Programs and How to Prepare a Loan Package walk business owners through steps that answer questions about what debt financing is, what loan programs are available, what small businesses should know about borrowing money, how to prepare a loan package, and how loan requests are reviewed by lenders.

The Finance Primer gives an overview of the SBA’s loan guaranty programs to help small businesses understand the variety of financial resources, including those from the SBA. The Loan Package course includes small business links to related information, and refers course participants for direct support in preparing a loan request to appropriate resources that include SBA district offices, SBA resource partners, and lenders.

Finance Primer: A Guide to SBA’s Loan Guaranty Programs is available at .

How to Prepare a Loan Package is available at registration/index.cfm?CourseId=28 .

The Senate in June confirmed three Bush nominees to the SEC. The three lawyers—Luis Aguilar, Troy Paredes and Elisse B. Walter—fill out the five-member SEC. Aguilar comes to the SEC from the law firm McKenna Long & Aldridge LLP; Paredes from the faculty of Washington University’s School of Law; and Walter, a career regulator with prior experience in the SEC’s Division of Corporation Finance and Office of the General Counsel, from the Financial Industry Regulatory Authority. For more information on the SEC commissioners, visit .

J. Clarke Price, president and CEO of the Ohio Society of CPAs, began his volunteer chairmanship of the American Society of Association Executives (ASAE) at its annual meeting in August. Price is the first state CPA society executive to serve as chair of ASAE, according to Cynthia Lund, AICPA vice president–State Society Affairs. “Clarke continues to be one of the AICPA’s and the profession’s most enthusiastic champions,” Lund said, and his work on behalf of the profession has earned him the AICPA Distinguished Service Award, among other distinctions throughout his career.

The ASAE’s mission is “to help associations transform society through the power of collaborative action,” according to its Web site ( ). The society has more than 22,000 association CEOs, staff professionals, industry partners and consultant members.



Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.