The ASB has approved for issuance eight statements on auditing standards (SASs) for audits of nonissuers related to risk assessment. These standards address the auditor’s assessment of the risk of material misstatements in financial statement audits and the design of audit procedures responsive to such risks ( www.aicpa.org/members/div/auditstd/2005_06_15_risk_assess.htm ). The
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TOPICS / TAX
International tax
GAAP
FASB is codifying U.S. GAAP literature for nongovernment entities into a single authoritative reference that will supersede all existing standards and be available online. The board is seeking researchers’ feedback on the capabilities such a system should have ( www.fasb.org ).
FYI
Robert L. Bunting, AICPA immediate past chair, was appointed to the board of the International Federation of Accountants for a three-year term. In this post he will help determine how the international accountancy profession can best meet its public-interest responsibilities and contribute to worldwide economic growth and stability. Bunting is
International
The International Accounting Standards Board (IASB) amended International Accounting Standard 21, The Effects of Changes in Foreign Exchange Rates, to clarify its requirements and to resolve certain implementation concerns. The IASB also published a discussion paper, Measurement Bases for Financial Accounting—Measurement on Initial Recognition, that was prepared by the staff
Accounting
The AICPA issued a set of technical practice aid questions and answers (TPAs 6910.16–.20) on presentation and disclosure issues facing nonregistered investment partnerships. Another set (TPAs 2130.09–.35) answers questions related to implementing Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. The TPAs
Peer Review
The AICPA published online an article on members’ perceptions of its peer review program and other issues being studied by the Peer Review Task Force—for example, whether review results should be confidential ( www.aicpa.org/transparency/member_perceptions.htm ). The Institute encourages CPAs in public practice or business and industry to discuss the role
Investment
The IRS’s revenue ruling 2006-1 clarifies that income from commodity-index derivatives contracts does not help a mutual fund qualify for the usual tax benefits ( www.irs.gov/pub/irs-drop/rr-06-01.pdf ). The service will apply its newly announced position prospectively so that funds will have enough time to adapt to it and communicate it
Retirement
The Treasury Department and the IRS made final regulations under IRC sections 401(k) and 401(m) that allow sponsors to design retirement plans in which employees can make designated Roth IRA contributions. As a result, workers can choose to make all or part of their 401(k) deferrals on an after-tax basis,
Government Accounting
The Governmental Accounting Standards Board (GASB) published a Guide to Implementation of GASB Statement No. 44 on the Statistical Section, which explains in question-and-answer format how the comprehensive annual financial reports of state and local governments should present trend information on financial results, major revenue sources, outstanding debt, economic and
Succession Planning
The AICPA’s PCPS Firm Practice Center is offering practitioners a free white paper, “Preparing for Transition: The State of Succession Planning and How to Handle the Process in Your Firm,” that describes best practices and shows firms how to benchmark their succession plans against those of their peers ( www.aicpa.org/pcps
Privacy
The IRS issued proposed regulations on the disclosure and use of tax-return information by return preparers. While a related IRS press release describes how the regulations will affect the offshoring of tax returns or tax-return information, they have broader implications for tax practitioners. Generally, the regulations revise the manner and
Auditing
The AICPA Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) no. 102, Defining Professional Requirements in Statements on Auditing Standards, and Statement on Standards for Attestation Engagements (SSAE) no. 13, Defining Professional Requirements in Statements on Attestation Engagements, which apply to audit and attestation engagements performed for nonissuers
Ethics
The AICPA Professional Ethics Executive Committee (PEEC) adopted two ethics rulings that provide guidance on how members’ offer or acceptance of gifts or entertainment to or from clients, customers or vendors of their employer affects the members’ independence and objectivity ( www.aicpa.org/download/ethics/ ). The ethics rulings under Rule 101, “Independence,”
International
The European Commission (EC) adopted a regulation endorsing the amended International Accounting Standard (IAS) no. 39, Financial Instruments: Recognition and Measurement, also known as the fair value option ( http://europa.eu.int/comm/internal_market/accounting/ias_en.htm ). The regulation endorses the fair value option, which previously had been carved out of the EC’s endorsement of IAS
FYI
Following the resignation of William J. McDonough, the SEC appointed William D. Gradison Jr. acting chair of the PCAOB and adopted new procedures for SEC Chairman Christopher Cox to use in filling the position. Gradison is a founding member of the PCAOB. The PCAOB selected Thomas Ray to succeed Douglas
Accounting
FASB issued Staff Position (FSP) FIN 45-3, Application of FASB Interpretation No. 45 to Minimum Revenue Guarantees Granted to a Business or Its Owners, which amends Interpretation no. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others ( www.fasb.org/fasb_staff_positions/fsp_fin45-3.pdf ). The FSP clarifies that
Banking
The Federal Deposit Insurance Corporation (FDIC) issued advance notice of a proposed rule that would make it easier to ascertain whether FDIC insurance covered deposits in banks with more than 250,000 customer accounts and $2 billion in domestic deposits ( www.fdic.gov/news/news/press/2005/pr12205.html ). The last time the FDIC updated its deposit
Employee Benefits
The Treasury Department and the IRS released Notice 2005-86, which clarifies that an individual participating in a flexible spending arrangement (FSA) is ineligible to contribute to a health savings account (HSA) during an FSA grace period, which extends the covered expense eligibility time frame up to 2 months into the
Crowding on Millionaires Row
SURVEY SAVVY T he number of U.S. households with more than $1 million in net worth (excluding the primary residence) has increased for the third consecutive year. Surprisingly the rise was fueled neither by real estate investments nor stock market growth but, instead, by the householders’ long-term accumulation of wealth.
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