The PCAOB and SEC issued guidance on the registration of auditors of nonpublic broker-dealers. Until recently, auditors of nonpublic broker- dealers were not required to register with the PCAOB as a result of a series of SEC exemptions dating back to 2003. The latest SEC order, issued in December 2006, extended the exemption to cover financial statements for fiscal years ending before Jan. 1, 2009. That exemption expired Dec. 31, triggering a requirement that financial statements of nonpublic broker-dealers for fiscal years ending after Dec. 31, 2008, must be audited by an accounting firm that is registered with the PCAOB.
Auditors of nonpublic broker-dealers must be registered with the PCAOB as of the date of the auditor’s report. The SEC is urging auditors to begin the registration process with the PCAOB as soon as possible.
The new PCAOB and SEC guidance, available at tinyurl.com/ac77ox and tinyurl.com/cknhcu, respectively, addresses the registration process, including timing and fees; the extent to which applications are public and the process for seeking confidentiality; obligations associated with being registered, including periodic reporting and annual fees; and the applicable auditor reporting and independence requirements.
The International Accounting Standards Board (IASB) issued amendments to IFRS 7, Financial Instruments: Disclosures, that bring the fair value disclosure requirements of IFRS more closely into line with U.S. GAAP.
The amendments form part of the IASB’s focused response to the financial crisis and address the G-20 conclusions aimed at improved transparency and enhanced accounting guidance. The improvements also reflect discussions by the IASB’s Expert Advisory Panel on measuring and disclosing fair values of financial instruments when markets are no longer active.
The amendments to IFRS 7 introduce a three-level hierarchy for fair value measurement disclosures and require entities to provide additional disclosures about the relative reliability of fair value measurements.
In addition, the amendments clarify and enhance the existing requirements for the disclosure of liquidity risk. This is aimed at ensuring that the information disclosed enables users of an entity’s financial statements to evaluate the nature and extent of liquidity risk arising from financial instruments and how the entity manages that risk.
The amendments to IFRS 7 apply for annual periods beginning on or after Jan. 1, 2009. However, an entity will not be required to provide comparative disclosures in the first year of application. For more information, visit www.iasb.org.