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Proposed audit and accounting guide : Oil and gas reserve information required by regulation S-X;Oil and gas reserve information required by regulation S-X; Exposure draft (American Institute of Certified Public Accountants), 1979, April 13
American Institute of Certified Public Accountants. Oil and Gas Reserve Data Committee
An exposure draft of a proposed audit and accounting guide on "Oil and Gas Reserve Information Required by Regulation S-X" accompanies this letter. The proposed guide discusses the auditing procedures to be applied to oil and gas reserve information that is required by the SEC to be included in the notes to the financial statements of entities with oil and gas producing activities . The proposed guide originally was developed because of FASB Statement no . 19 requirements and amendments to Regulation S-X by the Securities and Exchange Commission (ASR nos. 253 and 257) . The FASB has amended FASB Statement no . 19 to permit oil and gas reserve quantity information to be disclosed as supplemental information outside of the basic financial statements. The SEC has not indicated that it will similarly modify amendments to Regulation S-X that require certain reserve quantity and value information to be included in the notes to the financial statements of entities with oil and gas producing activities, nor has it indicated that it will permit the reserve information to be marked "unaudited." This proposed guide is being exposed for public comment at this time to encourage the timely consideration of the auditing procedures that an auditor should apply when oil and gas reserve information is included in the notes to the financial statements. It does not impose any disclosure requirements concerning reserve information. Two issues are not discussed in the proposed guide because of the timing of recent developments—the procedures that might be appropriate for oil and gas reserve quantity information that is disclosed as supplemental information as provided by FASB Statement no. 25, and the auditor's reporting responsibilities under the varying circumstances contemplated by the applicable disclosure provisions of both FASB Statement no. 25 and ASR nos. 253 and 257. The proposed guide provides that if oil and gas reserve information is included in the notes to the financial statements as required by ASR nos. 253 and 257, the auditor ordinarily should obtain a consulting reservoir engineer's opinion covering all, or in certain cases a portion of, the reserves to satisfy the requirement that he obtain sufficient, competent evidential matter concerning information included in the financial statements.
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Proposed statement of position : Accounting for real estate acquisition, development, and construction costs;Accounting for real estate acquisition, development, and construction costs; Exposure draft (American Institute of Certified Public Accountants), 1979, July 23
American Institute of Certified Public Accountants. Real Estate Accounting Committee
Recent trends in the real estate industry have produced dramatic increases in the size of enterprises, the cost of individual projects, and the time required to complete the development of individual projects. Those developments have focused attention on the need for guidance on accounting for costs associated with real estate acquisition, development, and construction. The accounting standards division of the American Institute of Certified Public Accountants has prepared this statement of position in response to that need. The recommendations in this statement apply to accounting for real estate acquisition, development, and construction costs in financial statements that are intended to present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles regardless of the nature of the entity involved, except as indicated in this paragraph. In providing guidance, the division believes that it is desirable to reduce, to the extent practicable, alternative practices in accounting for costs of real estate acquisition, development, and construction. This statement does not apply to transactions covered by the AICPA industry accounting guide, Accounting for Retail Land Sales. That guide applies to "retail lot sales on a volume basis with down payments that are less than those required to evaluate collectibility of casual sales of real estate." AICPA Statement of Position 78-3, Accounting for Costs to Sell and Rent, and Initial Rental Operations of, Real Estate Projects, should be followed in accounting for the costs and operations identified in that statement.
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Proposed statement of position: Clarification of reporting practices concerning hospital-related organizations;Clarification of reporting practices concerning hospital-related organizations; Exposure draft (American Institute of Certified Public Accountants), 1979, Aug. 31
American Institute of Certified Public Accountants. Subcommittee on Health Care Matters
The subcommittee on health care matters believes that the section of the Hospital Audit Guide, "Other Related Organizations'' (pages 11 and 12), should be superseded by and replaced with the following text.
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Proposed statement on standards for accounting and review services : compilation and review of financial statements ;Compilation and review of financial statements; Exposure draft (American Institute of Certified Public Accountants), 1978, Jan. 20
American Institute of Certified Public Accountants. Accounting and Review Services Committee
This Statement provides that a CPA may be engaged to compile or review annual or interim financial statements of an entity that is not required to file financial statements with a regulatory agency in connection with the sale or trading of its securities in a public market. This Statement provides guidance to CPAs concerning the standards and procedures applicable to such engagements.
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Accounting for advance refundings of tax-exempt debt, June 30, 1978 : proposal to Financial Accounting Standards Board; Statement of position 78-05;
American Institute of Certified Public Accountants. Accounting Standards Division
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Accounting for costs to sell and rent, and initial rental operations of, real estate projects, a proposed recommendation to the Financial Accounting Standards Board; Statement of position 78-03;
American Institute of Certified Public Accountants. Accounting Standards Division
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Accounting for product financing arrangements, December 26, 1978; proposal to Financial Accounting Standards Board; Statement of position 78-08;
American Institute of Certified Public Accountants. Accounting Standards Division
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Accounting for property and liability insurance companies : proposal to the Financial Accounting Standards Board to amend AICPA industry audit guide, Audits of fire and casualty insurance companies; Statement of position 78-06;
American Institute of Certified Public Accountants. Accounting Standards Division
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Accounting practices of real estate investment trusts : proposal to Financial Accounting Standards Board to amend Statement of position 75-2; Statement of position 78-02;
American Institute of Certified Public Accountants. Accounting Standards Division
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Accounting principles and reporting practices for certain nonprofit organizations : a proposed recommendation to the Financial Accounting Standards Board, December 31, 1978; Statement of position 78-10;
American Institute of Certified Public Accountants. Accounting Standards Division
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Application of the deposit, installment, and cost recovery methods in accounting for sales of real estate; a proposed recommendation to the Financial Accounting Standards Board; Statement of position 78-04;
American Institute of Certified Public Accountants. Accounting Standards Division
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Financial accounting and reporting by hospitals operated by a governmental unit, July 31, 1978 : proposal to the Financial Accounting Standards Board to amend AICPA industry audit guide, Audits of state and local governmental units; Statement of position 78-07;
American Institute of Certified Public Accountants. Accounting Standards Division
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Proposed statement of position on accounting for motion picture films : proposal to the Financial Accounting Standards Board to amend AICPA industry accounting guide Accounting for motion picture films ;Accounting for motion picture films; Exposure draft (American Institute of Certified Public Accountants), 1978, July 26
American Institute of Certified Public Accountants. Accounting Standards Division
This statement of position amends the Guide, Accounting for Motion Picture Films, by inserting the following as the concluding sentences of the description of availability (second paragraph on page 8): Thus, the availability condition is met when a film may be shown for the first time under a licensing agreement. The committee has concluded that restrictions on timing of subsequent showings of the film under the same license agreement, or a contemporaneous license with the same licensee, do not affect the availiablity date.
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Proposed statement of position on accounting for municipal bond funds;Accounting for municipal bond funds; Exposure draft (American Institute of Certified Public Accountants), 1978, Jan. 16
American Institute of Certified Public Accountants. Accounting Standards Division
A recent development in the investment company industry is the municipal bond fund (or tax-exempt bond fund) in corporate form made possible by the Tax reform act of 1976. This proposed addition to the audit guide presents the Committee's views on accounting and reporting matters and other considerations relating to municpal bond funds. While the discussion of taxes and distribution policies refers specifically to municipal bond funds in corporate form, the discussion of valuation and other matters applies to municipal bond funds in corporate form, partnership form, and unit investment trusts.
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Proposed statement of position on accounting for title insurance companies : a proposed recommendation to the Financial Accounting Standards Board;Accounting for title insurance companies; Exposure draft (American Institute of Certified Public Accountants), 1978, May 1
American Institute of Certified Public Accountants. Accounting Standards Division
In recent years, accountants, investors, and other users of financial statements have expressed concern over the acceptability of accounting alternatives for similar business transactions. The accounting standards division believes that it is not desirable to have acceptable accounting alternatives in the title insurance industry. Therefore, this statement of position expresses the division's recommendations on accounting methods that should be used in the areas in which accounting alternatives exist.
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Proposed statement of position on accounting principles and reporting practices for certain nonprofit organizations not covered by existing AICPA audit guides;Accounting principles and reporting practices for certain nonprofit organizations not covered by existing AICPA audit guides; Exposure draft (American Institute of Certified Public Accountants), 1978, Apr. 1
American Institute of Certified Public Accountants. Accounting Standards Division
Since a large number of nonprofit organizations are not covered by any of the industry audit guides (Hospital, Colleges and Universities, Voluntary Health and Welfare Organizations, and State and Local Governmental Units), this statement of position is issued to recommend financial accounting principles and reporting practices for all other nonprofit organizations that prepare financial statements in conformity with generally accepted accounting principles.
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Statements of position of the Accounting Standards Division as of January 1, 1978
American Institute of Certified Public Accountants. Accounting Standards Division
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Statement of position on accounting for investments in real estate ventures, December 29, 1978 : proposal to the Financial Accounting Standards Board; Statement of position 78-09;
American Institute of Certified Public Accountants. Accounting Standards Division. Committee on Real Estate Accounting
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Proposed statement of position on accounting for product repurchase agreements ;Accounting for product repurchase agreements; Exposure draft (American Institute of Certified Public Accountants), 1978, Mar. 30
American Institute of Certified Public Accountants. Accounting Standards Executive Committee
A number of methods have been developed whereby an entity finances inventory of product or materials without reporting in its balance sheet the liability or the related inventory. For example, a company transfers ("sells") a product to another party and simultaneously agrees to repurchase the product at a specified price over a specified period. For transactions of that type, the accounting standards division believes guidance is necessary to determine whether the company that "sells" the product and simultaneously agrees to repurchase the product has, in substance, transferred all the risks and rewards of ownership of the product. Based on that determination, a decision can be reached on whether the transferor should account for the transaction as a sale or as a financing transaction.
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Proposed statement of position on presentation and disclosure of supplementary current value information;Presentation and disclosure of supplementary current value information; Exposure draft (American Institute of Certified Public Accountants), 1978, Jan. 27
American Institute of Certified Public Accountants. Accounting Standards Executive Committee
This statement of position is being issued because the subject is receiving increased attention. Although supplementary current value information is not required for presentation of financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles, a few companies are now presenting such information (in addition to that disclosed pursuant to the requirements of the Securities and Exchange Commission for certain replacement cost information) in annual reports to shareholders.
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Proposed statement of position on reporting intercorporate tax allocations;Reporting intercorporate tax allocations; Exposure draft (American Institute of Certified Public Accountants), 1978, Mar. 15
American Institute of Certified Public Accountants. Accounting Standards Executive Committee
This statement deals with situations in which a parent company joins with one or more of its subsidiaries in filing a consolidated income tax return and, because of minority shareholder interests, credit evaluations, or other reasons, the parent or one or more subsidiaries prepares separate financial statements of the parent or a subsidiary involves "intercorporate income tax allocation"--an allocation of the provision for income taxes reported in the consolidated financial statements.
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Proposed statement on auditing standards : Review of interim financial information;Review of interim financial information; Exposure draft (American Institute of Certified Public Accountants), 1978, Dec. 1
American Institute of Certified Public Accountants. Auditing Standards Board
The major decision reflected in this exposure draft is that, based on the accountant's performance of specified review procedures, he should be permitted to issue a report, accompanied by an expression of assurance, on his review of interim financial information of publicly held entities. Such a report could accompany interim financial information issued by publicly held companies that is contained in interim reports issued to stockholders, the board of directors, or others, or filed periodically with regulatory agencies. The Auditing Standards Board believes the procedures established in Statement on Auditing Standards No. 10 continue to be appropriate for an accountant's review of interim financial information. Those procedures have been incorporated in this exposure draft and a requirement to obtain a client representation letter has been added.
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Clarification of accounting, auditing, and reporting practices relating to hospital malpractice loss contingencies; Statement of position 1978 March 1;Hospital audit guide;
American Institute of Certified Public Accountants. Auditing Standards Division
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Confirmation of insurance policies in force : audits of stock life insurance companies, August 4, 1978; Statement of position 1978 August 4;
American Institute of Certified Public Accountants. Auditing Standards Division
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Proposed statement of position on confirmation of insurance policies in force : audits of stock life insurance companies;Confirmation of insurance policies in force : audits of stock life insurance companies Audits of stock life insurance companies; Exposure draft (American Institute of Certified Public Accountants), 1978, Apr. 5
American Institute of Certified Public Accountants. Auditing Standards Division
The audit guide suggests confirmation of insurance policies in force directly with policyholders; however, the audit guide does not discuss circumstances when confirmation would be appropriate and, as a result, practice has varied. The purpose of the Statement of Position is to identify those circumstances in which the independent auditor ordinarily should confirm insurance policies in force. This Statement of Postiion is applicable to both stock and mutual life insurance companies.
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Proposed statement on auditing standards : analytical review procedures ;Analytical review procedures; Exposure draft (American Institute of Certified Public Accountants), 1978, May 15
American Institute of Certified Public Accountants. Auditing Standards Executive Committee
The proposed Statement provides guidance with respect to analytical review procedures applied in an examination made in accordance with generally accepted auditing standards. It discusses the timing and objectives of those procedures, identifies the procedures that should be considered in evaluating financial information, and provides a number of examples to illustrate factors the auditor should consider when planning and performing analytical review procedures. However, the proposed Statement does not specify the extent to which the auditor's reliance on substantive tests may be derived from tests of details of transactions and balances, from analytical review procedures or from any combination of both. According to the proposed Statement, the decision is a matter of professional judgment.
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Proposed audit and accounting guide: Computer assisted audit techniques; Exposure draft (American Institute of Certified Public Accountants), 1978, June
American Institute of Certified Public Accountants. Computer Services Executive Committee
The objectives of this guide are to: 1. Describe audit tools and techniques available to the auditor when a client uses electronic data processing (EDP) to process accounting data. 2. Relate EDP audit tools and techniques to audit objectives (for example, understanding the system, compliance tests of controls, tests of details of transactions and balances, and analytical review). 3. Describe an approach to planning and implementing the various tools and techniques.
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Proposed statement of position on accounting for investments of stock life insurance companies;Accounting for investments of stock life insurance companies; Exposure draft (American Institute of Certified Public Accountants), 1978, Aug. 4
American Institute of Certified Public Accountants. Insurance Companies Committee
In 1972, the AICPA Insurance Companies Committee issued the industry audit guide, Audits of Stock Life Insurance Companies (referred to in this statement of position as "guide"). Part II of the guide, which discusses the application of generally accepted accounting principles, includes a section on the "Valuation of Investments and Recognition of Realized and Unrealized Gains (Losses) Thereon." That section (p. 89) outlines five acceptable methods of accounting for gains or losses on the sale of all equity securities except preferred stocks. The accounting standards division believes that it is not desirable to have five alternative accounting methods for accounting for equity securities and related investment gains or losses by stock life insurance companies. Therefore, this statement of position expresses the division's conclusions on accounting for all investments and related realized and unrealized gains or losses of stock life insurance companies.1 This statement of position also expresses the division's conclusions on accounting for real estate by stock life insurance companies, which was not discussed in the guide. This statement of position applies only to stock life insurance companies.
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Proposed statement on quality control standards : system of quality control for a CPA firm ;System of quality control for a CPA firm; Exposure draft (American Institute of Certified Public Accountants), 1978, July 15
American Institute of Certified Public Accountants. Quality Control Review Division
The proposed statement provides that a CPA firm shall have a system of quality control for its auditing and accounting and review services. The system would comprehend all applicable elements of Statement on Auditing Standards no. 4, Quality Control Considerations for a Firm of Independent Auditors. The system would include the establishment of quality control policies and procedures, the assignment of responsibilities to the extent required for effective implementation of those policies and procedures, communication of those policies and procedures to personnel to provide reasonable assurance that the policies and procedures are understood, and monitoring of the effectiveness of the system of quality control. The proposed statement provides that the system of quality control shall be appropriately comprehensive and suitably designed in relation to a CPA firm's organizational structure, its quality control policies, and the nature of its practice. The proposed statement provides, also, that the nature and extent of a firm's quality control policies and procedures depend on a number of factors, such as its size, the degree of operating autonomy allowed its people and its practice offices, the nature of its practice, its organization, and economic considerations, including appropriate cost/benefit considerations. The proposed statement, issued in final form, would be the first statement on quality control standards and, as such, would provide a framework for future pronouncements on quality control standards
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Tentative conclusions and recommendations of the reports by Management Special Advisory Committee; Exposure draft (American Institute of Certified Public Accountants), 1978, Dec. 8
American Institute of Certified Public Accountants. Special Advisory Committee
The committee recommends that companies that disseminate annual reports include a report by management on the financial statements. The primary objective of the management report is to inform financial statement users of management's responsibility for those statements and the various means by which it is fulfilled. The management report should state that management is responsible for all the information in the annual report, whether audited or unaudited, and for the internal consistency of that information. Also, management should indicate that its responsibility for the financial statements includes making judgments and estimates and selecting accounting principles that are in accordance with generally accepted accounting principles appropriate in the circumstances. Because of cost-benefit considerations and other inherent limitations of the effectiveness of internal accounting control, management should make a representation phrased in terms of reasonable, rather than absolute, assurance that the objectives of internal accounting control are met. The composition and duties of the audit committee should be described or a cross-reference should be made to a separate section of the annual report or to a separate report of the audit committee where the description may be found. The management report should describe the role of the independent auditor to render an independent opinion on management's financial statements. If there has been a change in auditors, management should indicate whether the decision to change was recommended or approved by the audit committee and should offer to furnish upon request a copy of Form 8-K covering the change.
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Accounting by hospitals for certain marketable equity securities : proposal to Financial Accounting Standards Board to amend AICPA industry audit guide on audits of hospitals; Statement of position 78-01;
American Institute of Certified Public Accountants. Subcommittee on Health Care Matters
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Proposed statement of position on modification of reporting practices relating to hospital related organizations and funds held in trust by others;Modification of reporting practices relating to hospital related organizations and funds held in trust by others; Exposure draft (American Institute of Certified Public Accountants), 1978, Feb. 10
American Institute of Certified Public Accountants. Subcommittee on Health Care Matters
The AICPA's Hospital Audit Guide presently calls for combined financial reporting for related organizations if "significant resources or operations of a hospital . . . are handled by such organizations and they . . . are under the control of (or common control with) hospitals. . . ." However, the guide does not give any guidance about or explanation of what constitutes "control" or "hospital resources." As a consequence, a variety of reporting practices are being followed in identical or similar circumstances. The financial statements of some related organizations are combined with those of hospitals, while the financial statements of others in similar circumstances are not. The related facts and circumstances are sometimes disclosed and sometimes not. Concerns are expressed that new organizations are being created and existing organizations arc being modified in a manner designed to overshadow the substance of the relationship and to avoid the requirements for combined financial statements. In these circumstances, the subcommittee believes that the Hospital Audit Guide should be modified to give more guidance in this increasingly important and complex area. Furthermore, since funds held in trust for the; benefit of hospitals by independent organizations are similar in many respects to resources held by hospital related organizations and to endowment and other restricted funds held by hospitals, the subcommittee believes it is necessary to reconsider financial reporting for funds held in trust by others for the benefit of hospitals.
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Accounting for interfund transfers of state and local government units : proposal to Financial Accounting Standards Board to amend AICPA industry audit guide on audits of state and local governmental units; Statement of position 77-2;
American Institute of Certified Public Accountants. Accounting Standards Division
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Financial accounting and reporting by investment companies, April 15, 1977 : proposal to Financial Accounting Standards Board to amend AICPA Industry audit guide on audits of investment companies; Statement of position 77-1;
American Institute of Certified Public Accountants. Accounting Standards Division
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Proposed statement of position on accounting for advance refundings of debt;Accounting for advance refundings of debt; Exposure draft (American Institute of Certified Public Accountants), 1977, Dec. 27
American Institute of Certified Public Accountants. Accounting Standards Division
A refunding of debt is the replacement of old debt with new debt and takes place to obtain a preceived economic adavantage. This statement of position addresses accounting for advance refundings. It is not intended to modify APB Opinion 26, Early Extinguishment of Debt, or FASB Statement 4, Reporting Gains and Losses from Extinguishment of Debt. This statement of position should be applied to regulated companies that are subject to the rate-making process in accordance with the provisions of the Addendum.
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Proposed statement of position on accounting practices of real estate investment trusts : an amendment of position 75-2 ;Accounting practices of real estate investment trusts : an amendment of position 75-2; Exposure draft (American Institute of Certified Public Accountants), 1977, Dec. 20
American Institute of Certified Public Accountants. Accounting Standards Division
The recommended accounting for real estate loans and foreclosed properties in Statement of Position (SOP) 75-2, Accounting Practices of Real Estate Investment Trusts, issued June 27, 1975, is inconsistent with certain provisions of Statement of Financial Accounting Standards (SFAS) no. 15, Accounting by Debtors and Creditors for Troubled Debt Restructurings, issued by the Financial Standards Board in June 1977. The accounting standards division believes that SOP 75-2 should be amended to conform its recommendations to the provisions of SFAS no. 15.
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Accounting for interfund transfers of state and local government units; Exposure draft (American Institute of Certified Public Accountants), 1977, Jan. 14
American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Chapter 2 of the AICPA Industry Audit Guide,, Audits of State and Local Governmental Units, includes accounting guidelines for four categories of interfund transfers. The first category includes transactions that would be treated as revenues or expenditures had they been conducted with outsiders. These transfers are accounted for as revenues of the recipient fund and expenditures of the disbursing fund. The second category includes reimbursements of expenditures made by one fund for another. The reimbursement reduces the expenditures of the recipient fund. The third category includes recurring annual transfers between two or more budgetary funds and shifts resources from a fund legally required to receive revenue to a fund authorized to expend the revenue. These transfers are shown as separate items in each fund's statement of revenues and expenditures or equivalent financial statement. The fourth category includes nonrecurring transfers between funds that are analogous to capital transactions and represent a transfer of equity of the funds Involved. These transfers are treated as direct additions to or deductions from the fund balances of the respective funds. After publication of the Guide, questions arose as to which category covers transfers that are between a general or special revenue fund and an enterprise fund and that subsidize the operations of the recipient fund. Such transfers are similar to those covered by the third category. However, the Guide limits the third category to budgetary funds and enterprise funds are not "budgetary funds. Also, the third category is limited to recurring transfers and the transfers in question may or may not be recurring in nature. The Committee on State and Local Government Accounting believes that the third category should include transfers between funds other than budgetary funds, particularly transfers between a general or special revenue fund and an enterprise fund. Also, the Committee believes that the category should not be restricted to recurring annual transfers.
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Accounting for service transactions; Exposure draft (American Institute of Certified Public Accountants), 1977, June 30
American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Because of the wide variety of types of service transactions and the different characteristics of each type, diverse accounting methods have evolved to apply the fundamental principles to service revenues and costs. Furthermore, diverse accounting methods are used by entities engaging in similar transactions. The Division believes that the range of alternative accounting methods should be narrowed.
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Financial accounting and reporting by hospitals operated by a governmental unit; Exposure draft (American Institute of Certified Public Accountants), 1977, Aug. 15
American Institute of Certified Public Accountants. Accounting Standards Executive Committee
The AICPA Industry Audit Guide, Hospital Audit Guide, does not specifically address the financial accounting and reporting practices of hospitals that are operated by a governmental unit, but states that the practices it discusses apply to all hospitals. The AICPA Industry Audit Guide on Audits of State and Local Governmental Units refers specifically to government operated hospitals as being within the scope of the Guide. This ambiguity has caused questions to be raised as to the financial accounting and reporting practices that should be followed by hospitals that are operated by governmental units.
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Proposed statement of position on accounting by cable television companies;Accounting by cable television companies; Exposure draft (American Institute of Certified Public Accountants), 1977, Nov. 30
American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Cable television (CATV) companies have developed diverse specialized industry accounting practices over a period of years, with the result that their financial statements lack comparability. This statement of position summarizes CATV companies' current specialized industry accounting practices. A study of those accounting practices by the AICPA accounting standards division indicates a need for clarification and narrowing of alternative accounting practices within the industry.
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Proposed statement on auditing standards : auditor's report when there are contingencies;Auditor's report when there are contingencies; Exposure draft (American Institute of Certified Public Accountants), 1977, Oct. 31
American Institute of Certified Public Accountants. Auditing Standards Executive Committee
This Statement applies to auditor's reports issued in connection with examinations of financial statements prepared in conformity with generally accepted accounting principles. Its purpose is to describe the auditor's reporting considerations when there are contingencies that may have a material effect on the financial statements being examined.
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Proposed statement on auditing standards : Client representations;Client representations; Exposure draft (American Institute of Certified Public Accountants), 1977, Jan. 31
American Institute of Certified Public Accountants. Auditing Standards Executive Committee
This Statement establishes a requirement that the independent auditor obtain certain written representations from management as a part of an examination made in accordance with generally accepted auditing standards and provides guidance concerning the representations to be obtained.
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Proposed statement on auditing standards : Planning and supervision;Planning and supervision; Exposure draft (American Institute of Certified Public Accountants), 1977, Aug. 31
American Institute of Certified Public Accountants. Auditing Standards Executive Committee
The proposed Statement provides guidance to the auditor making an examination in accordance with generally accepted auditing standards on the considerations and procedures applicable to planning and supervision, including preparing audit programs, obtaining knowledge of the entity's business, and dealing with differences of opinion among firm personnel. The Statement, if adopted, would require an auditor to prepare a written audit program that sets forth in reasonable detail the audit procedures that the auditor believes are necessary to accomplish the objectives of the examination. It would also require the auditor to obtain a knowledge of matters that relate to the nature of the entity's business, its organization, and its operating characteristics, and to consider matters affecting the industry in which the entity operates.
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Proposed statement on auditing standards : Segment information ;Segment information; Exposure draft (American Institute of Certified Public Accountants), 1977, Aug. 31
American Institute of Certified Public Accountants. Auditing Standards Executive Committee
The proposed Statement provides guidance to an auditor in examining and reporting on financial statements that are required to include segment information in conformity with FASB Statement No. 14, "Financial Reporting for Segments of a Business Enterprise." According to the proposed Statement, an examination made for the purpose of expressing an opinion on financial statements taken as a whole ordinarily would not be sufficient to enable the auditor to express a separate opinion on the segment information. It states that the objective of auditing procedures applied to segment information should be to provide the auditor with a reasonable basis for concluding whether the information is presented in conformity with FASB Statement No. 14 in relation to the financial statements taken as a whole. Although the auditor's materiality judgments with respect to segment information would relate to the financial statements taken as a whole and not to any one particular segment, the proposed Statement notes that situations may arise in practice where the auditor will conclude that a matter relating to segment information is material to the financial statements taken as a whole even though, in his judgment, it is quantitatively immaterial to those financial statements. The Statement, if adopted, would require the auditor to apply certain auditing procedures to segment information presented in financial statements. Also, it recognizes that it may be necessary for the auditor to modify the audit tests that would otherwise be applied to the financial statements taken as a whole if those statements include segment information, and it identifies factors that should be considered by the auditor in making that determination. In addition, the proposed Statement provides guidance on the auditor's reporting responsibilities in connection with segment information.
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Application of the deposit, installment, and cost recovery methods in accounting for sales of real estate; Exposure draft (American Institute of Certified Public Accountants), 1977, Aug. 15
American Institute of Certified Public Accountants. Committee on Accounting
Questions have arisen with respect to the application of the general principles and specific conclusions set forth in the AICPA Industry Accounting Guide, Accounting for Profit Recognition on Sales of Real Estate, issued in 1973. The Division addressed some of those questions in Statement of Position No. 75-6, issued on December 29, 1975. This Statement presents recommendations as a result of questions concerning the application of the deposit, installment, and cost recovery methods, which are described in paragraphs 34 to 37 of the Guide, in accounting for sales of real estate. The Guide does not specifically address the application of these accounting methods, and diverse methods of application have developed in practice. The Division believes that narrowing the range of alternative practices is desirable.
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Accounting for investments in real estate ventures; Exposure draft (American Institute of Certified Public Accountants), 1977, July 22
American Institute of Certified Public Accountants. Committee on Real Estate Accounting
The accompanying exposure draft has been prepared by the Committee on Real Estate Accounting of the AICPA's Accounting Standards Division to obtain the comments of interested persons and organizations. It is intended to help focus attention on the issues considered and foster the interchange of ideas among those interested in improving accounting and reporting standards. The Committee urges respondents to give particular attention to paragraph 7 of the exposure draft. Paragraph 7 describes two alternative methods of reporting noncontrolling investors' equity in real estate general partnerships: (1) reporting the investor's equity as a single investment amount in the balance sheet; and (2) reporting separately the elements of the investment by including in current assets, noncurrent assets, current liabilities, and noncurrent liabilities the investor's equity in the partnership's corresponding items, either in total or in greater detail. Although the exposure draft does not express a preference between the two methods, it recommends the use of the same method of presentation in the balance sheet and the income statement. The Division, however, may recommend one of the two methods in the final Statement of Position. Therefore, in commenting on this matter, respondents should indicate, and provide supporting reasons for, their preferences to assist the Division in reaching a decision.
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Audit and accounting guide for savings and loan associations; Exposure draft (American Institute of Certified Public Accountants), 1977, July
American Institute of Certified Public Accountants. Committee on Savings and Loan Associations
Savings and loan associations are corporations chartered either by the state in which they operate or the Federal Home Loan Bank Board (FHLBB). All associations chartered by the FHLBB are known as "federal" associations and have the word "Federal" in their corporate names. The majority of the savings and loan associations are mutual institutions; they are owned by the savers who, together with the borrowers, are members entitled to vote at annual meetings. Most states provide for the organization of mutual associations. In addition, several states provide for capital stock associations that are authorized by state charter to issue and sell capital stock (sometimes called permanent reserve shares, guaranty stock, or guarantee stock) to investors. This capital stock represents equity capital which cannot be withdrawn, and it is not insured by the Federal Savings and Loan Insurance Corporation (FSLIC). The applicable laws and regulations of the states vary, but usually include requirements or restrictions concerning issuance of capital stock, such as a minimum amount of initial consideration, the rights of stockholders, or the payment of dividends. These requirements may be considerably more restrictive than those generally applicable to other corporations. In the event that the meaning and applicability of the regulatory requirements are not clear and interpretation is necessary, the auditor should request the association to obtain an opinion from an attorney or from the regulatory authority. All federal associations are subject to the rules and regulations of the FSLIC (Rules and Regulations for Insurance of Accounts) and the FHLBB (Rules and Regulations for the Federal Savings and Loan System) and the Federal Home Loan Bank System. State-chartered associations are subject to the laws and regulations of the state under whose charter they operate, and if federally insured, are also subject to the rules and regulations of the Federal Home Loan Bank System and the FSLIC. Some of the rules and regulations governing both federal and state-chartered associations pertain to accounting, although the majority of regulations pertain to the maintenance of investments, savings accounts, and operations. The independent auditor should familiarize himself with the rules and regulations of the applicable supervisory authorities and should be informed of current revisions. The accrual basis of accounting is the only acceptable basis of accounting under generally accepted accounting principles for business enterprises. Regulations of the FHLBB require that insured institutions, with certain exceptions, prepare their financial statements on the accrual basis of accounting. The auditor may, however, encounter other bases of accounting, such as the cash and the modified accrual bases. Under the latter method, an association may record certain items, such as interest income from investments and interest expense on borrowed money, on the accrual method, whereas other items of income and expense may be recorded on the cash basis. When there are material variations from generally accepted accounting principles, the independent auditor must exercise his judgment in determining whether a qualified opinion or an adverse opinion is. required. However, the auditor should be aware that the FHLBB may reject an audit report that does not contain an unqualified opinion in a case where extended auditing procedures or appropriate adjust ments would enable the issuance of an unqualified opinion. Under Rules and Regulations for Insurance of Accounts, all federal associations and state-chartered associations whose accounts are insured by the FSLIC are subject to examination by the Office of Examinations and Supervision (OES) of the FHLBB. Frequently, joint examinations of state-chartered associations are made by OES and by the state regulatory authority which examines and supervises such associations. The scope of state supervisory examinations of state-chartered associations that have independent audits varies from one state to another. It is not practical to cover the policy of each state in this publication; however, in some states the policy is quite similar to that of federal authorities.
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Proposed statement of position on accounting for property and liability insurance companies;Accounting for property and liability insurance companies; Exposure draft (American Institute of Certified Public Accountants), 1977, Oct. 31
American Institute of Certified Public Accountants. Insurance Companies Committee
In recent years, accountants, investors, and other users of financial statements have expressed concern over the acceptability of alternative accounting methods for similar business transactions. The Accounting Standards Division believes that it is not desirable to have acceptable alternative accounting methods in the property and liability insurance industry. Therefore, the Division is expressing in this Statement its position on preferable accounting methods in each of the areas in which alternative:; exist, except for the issue of discounting loss reserves as more fully described on page 11, and the issue of using anticipated investment income in the computation of premium deficiencies which is discussed on page 13. The Division is also not addressing the issues related to the accounting principles to be followed by title insurance companie