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Omnibus proposal of Professional Ethics Division interpretations and rulings; Exposure draft (American Institute of Certified Public Accountants), 2006, Sept. 8

American Institute of Certified Public Accountants. Professional Ethics Executive Committee

Consistent with the original proposal issued in September 2005, the proposed interpretation states that independence would not be impaired if a member and the client agree that the unsuccessful party in a lawsuit or alternative dispute resolution (ADR) proceeding between them will pay the legal fees and expenses of the successful party. The proposed interpretation retains the conclusion that an indemnification or limitation of liability provision related to nonattest services performed for an attest client (that is, where the provision relates only to the nonattest services engagement and not the attest engagement) would not impair a memberâ€™s independence with respect to that client.
Omnibus Proposal of Professional Ethics Division Interpretations and Rulings: Proposed Interpretation 101-6 Under Rule 101: Indemnification, Limitation of Liability, and ADR Clauses in Engagement Letters, Proposed Deletion of Ethics Ruling No. 94 Under Rule 101: Indemnification Clause in Engagement Letters, Proposed Deletion of Ethics Ruling No. 95 Under Rule 101: Agreement With Attest Client to Use ADR Techniques, Proposed Revision to Interpretation 101-3 Under Rule 101: Performance of Nonattest Services: Forensic Accounting Services and Tax Compliance Services, September 8, 2006; Exposure Draft (American Institute of Certified Public Accountants), 2006, September 8

American Institute of Certified Public Accountants. Professional Ethics Executive Committee
Proposed statement on standards for accounting and review services : Compilation of specified elements, accounts, or items of a financial statement;Compilation of specified elements, accounts, or items of a financial statement; Exposure draft (American Institute of Certified Public Accountants), 2005, March 18

American Institute of Certified Public Accountants. Accounting and Review Services Committee

Statements on Standards for Accounting and Review Services (SSARS) currently provide guidance concerning the standards and procedures applicable to compilations and reviews of financial statements. By definition, presentations of specified elements, accounts, or items of a financial statement, or pro forma financial information are not financial statements. This proposed Statement will allow an accountant to compile and report on specified elements, accounts, or items of a financial statement and to compile and report on pro forma financial information in accordance with SSARS. It should be noted that this proposed standard would apply when an accountant is engaged to compile, or does issue a compilation report on, specified elements, accounts, or items of a financial statement or pro forma financial information. The ARSC recognizes that this approach is inconsistent with Statements on Standards for Accounting and Review Services (SSARS) No. 1 through No. 11. Those Statements set forth performance and communication requirements when an accountant submits unaudited financial statements of a nonpublic entity to his or her client or to third parties (SSARS No. 8, Amendment to Statements on Standards for Accounting and Review Services No. I, Compilation and Review of Financial Statements [AICPA, Professional Standards, vol. 2, AR sec. 100], allows the accountant to either report on management use only financial statements, or document an understanding with the entity through the use of an engagement letter regarding the services to be performed and the limitations on the use of the financial statements). The ARSC believes that this approach to specified elements, accounts, or items of a financial statement or pro forma financial information (subject matter that is less than a financial statement as defined by SSARS No. 1 [AR sec. 100.04]) responds best to user and member needs while at the same time protecting the interests of the public. This proposed Statement will not amend or revise the guidance in Chapter 4, "Reporting on Pro Forma Financial Information," of Statement on Standards for Attestation Engagements (SSAE) No. 10, Attestation Standards: Revision and Recodification (AICPA, Professional Standards, vol. 1, AT sec. 401), which provides guidance to a practitioner who is engaged to issue or does issue an examination or review report on pro forma financial information. Additionally, this proposed Statement will not amend or revise the guidance in Statement on Auditing Standards No. 62, Special Reports (AICPA, Professional Standards, vol. 1, AU sec. 623), as amended, which provides guidance when an independent auditor is requested to express an opinion on one or more specified elements, accounts, or items of a financial statement.
Proposed statement on standards for accounting and review services : Omnibus statement on standards for accounting and review services, 2005 ;Omnibus statement on standards for accounting and review services, 2005; Exposure draft (American Institute of Certified Public Accountants), 2005, March 18

American Institute of Certified Public Accountants. Accounting and Review Services Committee

This proposed Statement will: 1. Amend SSARS No. 1, Compilation and Review of Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 100), to require the accountant to communicate any fraud that comes to his or her attention, even if the matter is considered inconsequential; 2. Amend SSARS No. 2, Reporting on Comparative Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 200), to allow for the successor accountant to compile or review a restatement adjustment when prior period financial statements have been changed; 3. Amend SSARS No. 1 to provide guidance regarding when an accountant should consider obtaining an updating representation letter from management. The proposed Statement would be effective for compilations and reviews of financial statements for periods ending on or after December 15, 2005. . Early application would be permitted. The proposed Statement would amend SSARS No. 1 and SSARS No. 2.
Proposed statement on standards for accounting and review services: Restricting the use of an accountant's compilation or review report;Restricting the use of an accountant's compilation or review report; Exposure draft (American Institute of Certified Public Accountants), 2005, March 18, 2005

American Institute of Certified Public Accountants. Accounting and Review Services Committee

This proposed Statement will provide guidance to accountants on restricting the use of reports issued pursuant to Statements on Standards for Accounting and Review Services (SSARS) by: 1. Defining the terms general use and restricted use. 2. Describing the circumstances in which the use of an accountantâ€™s report should be restricted. 3. Specifying the language to be used in accountantâ€™s reports that are restricted regarding use.
Accounting by insurance enterprises for deferred acquisition costs in connection with modifications or exchanges of insurance contracts; Statement of position 05-1;

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Comment Letters on Proposed statement on auditing standards: Amendment of statement on auditing standards no. 69, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles, for Nongovernmental Entities, Amendment of statement on auditing standards no. 69, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles, for Nongovernmental Entities, May 9, 2005

American Institute of Certified Public Accountants. Auditing Standards Board
Comment Letters on Proposed Statement on Auditing Standards, Amendment to Statement on Auditing Standards No. 69, The Meaning of Present Fairly in conformity with Generally Accepted Accounting Principles, For Nongovernmental Entities, May 9, 2005

American Institute of Certified Public Accountants. Auditing Standards Board
Comment Letters on Proposed statement on auditing standards: Communication of internal control related matters noted in an audit (To supersede Statement on Auditing Standards No. 60, Communication of Internal Control Related Matters Noted in an Audit), September 1, 2005

American Institute of Certified Public Accountants. Auditing Standards Board
Comment letters to Amendment to Due Professional Care in the Performance of Work of SAS No. 1, Codification of Auditing Standards and Procedures. 2005

American Institute of Certified Public Accountants. Auditing Standards Board
Proposed statement on auditing standards: Amendment of statement on auditing standards no. 69, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles, for Nongovernmental Entities;Amendment of statement on auditing standards no. 69, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles, for Nongovernmental Entities; Exposure draft (American Institute of Certified Public Accountants), 2005, May 9

American Institute of Certified Public Accountants. Auditing Standards Board

This exposure draft introduces a proposed Statement on Auditing Standards (SAS) that will amend SAS No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles (AICPA, Professional Standards, vol. 1, AU sec. 411). This proposed SAS applies to nongovernmental entities. It will have no impact on the generally accepted accounting principles (GAAP) hierarchy for state and local governments or for federal governmental entities.
Proposed Statement on Auditing Standards, Amendment to Statement on Auditing Standards No. 69, The Meaning of Present Fairly in conformity with Generally Accepted Accounting Principles, For Nongovernmental Entities, May 9, 2005; Exposure Draft (American Institute of Certified Public Accountants), 2005, May 9

American Institute of Certified Public Accountants. Auditing Standards Board
Proposed statement on auditing standards: Communication of internal control related matters noted in an audit (To supersede Statement on Auditing Standards No. 60, Communication of Internal Control Related Matters Noted in an Audit), September 1, 2005; Exposure draft (American Institute of Certified Public Accountants), 2005, Sept. 1

American Institute of Certified Public Accountants. Auditing Standards Board

This Statement establishes standards and provides guidance for communicating matters related to an entity's internal control over financial reporting1 observed during an audit of financial statements.2 The internal control related matters specified by this Statement should be communicated to management and those charged with governance. The term those charged with governance refers to the person(s) with responsibility for overseeing (a) the strategic direction of the entity and (b) the entityâ€™s financial reporting and disclosure process. In most entities, governance is a collective responsibility that may be carried out by a board of directors, a committee of the board of directors (for example, an audit committee), management, a committee of management (for example, a finance or budget committee), partners, or equivalent persons. In some smaller entities, one person may be charged with governance, for example, the owner in an owner-managed entity, or a sole trustee. Therefore, in some cases management and those charged with governance are the same people.
Proposed statement on auditing standards : Defining professional requirements in statements on auditing standards;Proposed statement on standards for attestation engagements : Defining professional requirements in statements on standards for attestation engagements;Defining professional requirements in statements on auditing standards;Defining professional requirements in statements on standards for attestation engagements; Exposure draft (American Institute of Certified Public Accountants), 2005, March 2

American Institute of Certified Public Accountants. Auditing Standards Board

In serving the public interest, the Auditing Standards Board (ASB) aims to set high quality auditing and assurance standards for nonissuers that are understandable, clear, and capable of consistent application, thereby serving to enhance the quality and uniformity of practice. In doing so, the ASB seeks to balance the needs of a wide range of users, including auditors, those responsible for governance, regulators, and the public in general. Until now, the accounting profession has not expressly defined imperatives used to describe different degrees of the auditor's responsibility when conducting audit engagements in accordance with generally accepted auditing standards and attestation engagements in accordance with the attestation standards. The ASB believes that by defining the levels of responsibilities, auditing and attestation standards will be clarified, thereby assisting auditors and practitioners with their work and improving the quality of audits and attestation engagements. The ASB also believes that using a definition of these imperatives in common with that used by the Public Companies Accounting Oversight Board (PCAOB) and that proposed by the International Auditing and Assurance Standards Board (IAASB) promotes common understanding of the audit or attestation engagement in the United States and abroad and, accordingly, is in the public interest. This exposure draft introduces a proposed Statement on Auditing Standards (SAS) entitled Defining Professional Requirements in Statements on Auditing Standards and a proposed Statement on Standards for Attestation Engagements entitled Defining Professional Requirements in Statements on Auditing Standards for Attestation Engagements. The proposed SAS and SSAE define the terminology the ASB will use to describe the degrees of responsibility that the requirements impose on the auditor or the practitioner. The proposed SAS and SSAE define two categories of professional requirements: 1. Requirements - The auditor or practitioner is required to comply with a requirement in all cases in which the circumstances exist to which the requirement applies. A requirement is indicated by the words must or is required. 2. Presumptive requirements - The auditor or practitioner is also required to comply with a presumptive requirement in all cases in which the circumstances exist to which the presumptive requirement applies, but in rare circumstances, the auditor or practitioner may depart from a presumptive requirement provided he or she documents his or her justification for departure and how alternative procedures performed in the circumstances were sufficient to achieve the objectives of the presumptive requirement. The word should indicates a presumptive requirement. SASs and SSAEs also contain explanatory material that is intended to provide further explanation and guidance on the professional requirements. Such explanatory material is intended to be descriptive rather than imperative. All professional requirements that a SAS or SSAE impose on the auditor or practitioner will be identifiable by the use of must, is required, or should statements. The definitions in the proposed SAS are consistent with the terms adopted by the PCAOB in Rule 3101, Certain Terms Used in Auditing and Related Professional Practice Standards, and the definitions proposed by the IAASB in its exposure draft, Proposed Policy Statement, "Clarifying Professional Requirements in International Standards Issued by the IAASB." The comment period for this exposure draft ends on May 15, 2005. Although the degree of responsibility attached to the terms must, is required, and should was not previously defined, the ASB believes that the terminology, as defined in this proposed SAS and SSAE, is consistent with the existing interpretation of the SASs and SSAEs. The provisions of these Statements will apply to existing SASs and SSAEs. This approach is consistent with the adoption of the use of terms by the PCAOB. The provisions of these Statements are not intended to apply to interpretive guidance issued by the ASB. The drafting conventions in the proposed SAS and SSAE will be applied on a prospective basis to exposure drafts approved for issue after final approval of this SAS and SSAE. Like the IAASB, the ASB intends to review all standards on a regular basis and to address national issues as circumstances require.
Proposed statements on auditing standards: Amendment to "Due Professional Care in the Performance of Work" of Statement on Auditing Standards No. 1, Codification of Auditing Standards and Procedures; Amendment to Statement on Auditing Standards No. 95, Generally Accepted Auditing Standards; Audit Evidence; Audit Risk and Materiality in Conducting an Audit; Planning and Supervision; Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement; Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained; Amendment to Statement on Auditing Standards No. 39, Audit Sampling; Exposure draft (American Institute of Certified Public Accountants), 2005, June 15

American Institute of Certified Public Accountants. Auditing Standards Board

These proposed SASs establish standards and provide guidance concerning the auditor's assessment of the risks of material misstatement in a financial statement audit, and the design and performance of audit procedures whose nature, timing, and extent are responsive to the assessed risks. Additionally, these proposed SASs establish standards and provide guidance on planning and supervision, the nature of audit evidence, and evaluating whether the audit evidence obtained affords a reasonable basis for an opinion regarding the financial statements under audit. These proposed SASs were originally exposed on December 2, 2002 (except for the amendment to SAS No. 1 which was approved for exposure by the ASB on April 28, 2005). As a result of significant revisions made to the original exposure draft, the ASB concluded that the exposure drafts should be re-exposed for comment.
Proposed statement on auditing standards : Audit documentation;Audit documentation; Exposure draft (American Institute of Certified Public Accountants), 2005, Jan. 12

American Institute of Certified Public Accountants. Auditing Standards Board and American Institute of Certified Public Accountants. Audit Documentation Task Force

This exposure draft introduces a proposed Statement on Auditing Standards (SAS) that will replace SAS No. 96, Audit Documentation (AICPA, Professional Standards, vol. 1, AU sec. 339). This proposed SAS establishes standards and provides guidance to an auditor on audit documentation for audits of financial statements or other financial information being reported on. Issues surrounding audit documentation continue to be discussed due to events affecting the profession that post-date the development and issuance of SAS No. 96. Specifically, some state regulators and government auditors seek more uniformity in the preparation, filing, and retention of audit documentation of nonissuers. Audit documentation is an essential element of audit quality. Although audit documentation alone does not guarantee audit quality, the process of preparing sufficient and competent audit documentation contributes to the quality of an audit. The Auditing Standards Board (ASB) believes this exposure draft is responsive to the issues that have been raised in the U.S. nonissuer community and will improve audit practice and serve the public interest. In developing this exposure draft, the ASB considered the documentation requirements of the Public Company Accounting Oversight Board's Auditing Standard No. 3, Audit Documentation; the International Auditing and Assurance Standards Board's exposure draft, ISA 230, Audit Documentation, issued in September 2004; suggestions received from the National Association of State Boards of Accountancy; and Government Auditing Standards issued by the Comptroller General of the United States. The proposed SAS: 1. Uses an "experienced auditor" as a reference point. The proposed SAS requires the auditor to consider, when preparing audit documentation, the needs of an experienced auditor having no previous connection with the audit to understand the procedures performed, the evidence obtained, and specific conclusions reached. An experienced auditor, for the purposes of this Statement, is defined as an individual who possesses the competencies and skills that would have enabled him or her to perform the audit and therefore has an understanding of audit processes and of auditing and reporting issues relevant to the industry in which the entity operates. 2. Lists factors that the auditor should consider in determining the nature and extent of the audit documentation to be prepared for a particular audit area or auditing procedure. 3. Requires the auditor, in documenting the nature, timing, and extent of audit procedures performed, to record (a) who performed the audit work and the date of such work and (b) who reviewed specific audit documentation and the date of such review. 4. Guides the auditor when making further changes to audit documentation after delivery of the auditor's report. It provides guidance on the auditor's response to information that becomes known in the period after the auditor's report. When new procedures are performed after this date, the auditor should document the change, when and by whom the changes were made, and the effect of the changes on the auditor's previous conclusions. 5. Proposes that the auditor assemble the audit documentation to form the final engagement file within 60 days following the delivery of the auditor's report to the entity. After this date, the proposed SAS requires the auditor not to delete or discard existing audit documentation, and to appropriately document any subsequent additions or changes. 6. Provides guidance on documentation that should be retained and requires the auditor to document audit evidence that is identified as being contradictory or inconsistent with the final conclusions, and how the auditor addressed the contradiction or inconsistency. 7. Specifies a minimum file retention period that is ordinarily not expected to be shorter than five years from the date of the auditor's report, recognizing that state statutes or other regulatory requirements may specify a longer retention period. 8. Requires the auditor to document his or her justification for a departure from the SASs in the working papers. In addition to the proposed audit documentation SAS, the exposure draft includes proposed amendments to SAS No. 1, Codification of Auditing Standards and Procedures (AICPA, Professional Standards, vol. 1, AU sec. 530.01 and .05, "Dating of the Independent Auditor's Report"). The proposed amendment requires that the auditor's report not be dated earlier than the date on which the auditor has obtained sufficient competent audit evidence to support the opinion on the financial statements. It also proposes an amendment to SAS No. 95, Generally Accepted Auditing Standards (AICPA, Professional Standards, vol. 1, AU sec. 150.04, "Generally Accepted Auditing Standards"). The amendment adds a requirement for the auditor to document his or her justification for a departure from the SASs in the working papers. This proposed SAS would supersede SAS No. 96 and amend SAS No. 1 and SAS No. 95.
Proposed statement on standards for valuation services : Valuation of a business, business ownership interest, security, or intangible asset;Valuation of a business, business ownership interest, security, or intangible asset; Exposure draft (American Institute of Certified Public Accountants), 2005, March 30

American Institute of Certified Public Accountants. Consulting Services Executive Committee

Given the increasing number of members of the AICPA who are performing business valuation engagements or some aspect thereof, the AICPA Consulting Services Executive Committee has written this standard to improve the consistency and quality of practice among AICPA members performing business valuations. AICPA members will be required to follow this standard whenever they undertake to perform a business valuation engagement that culminates in the expression of a conclusion of value or a calculated value.
Comment Letters on Omnibus proposal of professional ethics division interpretations and rulings, September 15, 2005

American Institute of Certified Public Accountants. Professional Ethics Executive Committee
Comment Letters on Proposal of Professional Ethics Division: Proposed revision to "Other Considerations" in interpretation 101-1, Interpretation of Rule 101, under rule 101 and proposed Conceptual Framework for AICPA Independence Standards, September 15, 2005

American Institute of Certified Public Accountants. Professional Ethics Executive Committee
Omnibus proposal of professional ethics division interpretations and rulings, June 17, 2005; Exposure draft (American Institute of Certified Public Accountants), 2005, June 17

American Institute of Certified Public Accountants. Professional Ethics Executive Committee

PROPOSED ETHICS RULING NO. 113 UNDER RULE 102: Acceptance or Offering of Gifts or Entertainment . PROPOSED ETHICS RULING NO. 114 UNDER RULE 101: Acceptance or Offering of Gifts and Entertainment to or From an Attest Client . PROPOSED DELETION OF ETHICS RULING NO. 1 UNDER RULE 101: Acceptance of a Gift. PROPOSED REVISION TO INTERPRETATION 501-1 UNDER RULE 501: Requests for Records or Other Documents by Clients Retention of Client Records. PROPOSED REVISION OF ETHICS RULING NO. 189 UNDER RULE 501: Requests for Client Records and Supporting Documents Other Information.
Omnibus proposal of professional ethics division interpretations and rulings, September 15, 2005; Exposure draft (American Institute of Certified Public Accountants), 2005, Sept. 15

American Institute of Certified Public Accountants. Professional Ethics Executive Committee

PROPOSED NEW INTERPRETATION 101-16 UNDER RULE 101: Indemnification, Limitation of Liability, and ADR Clauses in Engagement Letters . PROPOSED DELETION OF ETHICS RULING NO. 94 UNDER RULE 101: Indemnification Clause in Engagement Letters . PROPOSED DELETION OF ETHICS RULING NO. 95 UNDER RULE 101: Agreement With Attest Client to Use ADR Techniques . PROPOSED NEW INTERPRETATION 101-17 UNDER RULE 101: Performance of Client Advocacy Services, Fact Witness Testimony, and Forensic Accounting Services .
Proposal of Professional Ethics Division interpretations and rulings, April 18, 2005; Exposure draft (American Institute of Certified Public Accountants), 2005, April 18

American Institute of Certified Public Accountants. Professional Ethics Executive Committee

PROPOSED NEW INTERPRETATION 101-15 UNDER RULE 101: Financial Relationships; PROPOSED DELETION OF ETHICS RULING NO. 35 UNDER RULE 101. Stockholder in Mutual Funds; PROPOSED DELETION OF ETHICS RULING NO. 36 UNDER RULE 101 Participant in Investment Club; PROPOSED DELETION OF ETHICS RULING NO. 66 UNDER RULE 101. Memberâ€™s Retirement or Savings Plan Has Financial Interest in Client; PROPOSED DELETION OF ETHICS RULING NO. 68 UNDER RULE 101. Blind Trust; PROPOSED DELETION OF ETHICS RULING NO. 79 UNDER RULE 101 Memberâ€™s Investment in a Partnership That Invests in Client; PROPOSED DELETION OF ETHICS RULING NO. 109 UNDER RULE 101 Memberâ€™s Investment in Financial Services Products That Invest in Clients.
Proposal of Professional Ethics Division: Proposed revision to "Other Considerations" in interpretation 101-1, Interpretation of Rule 101, under rule 101 and proposed Conceptual Framework for AICPA Independence Standards, September 15, 2005; Exposure draft (American Institute of Certified Public Accountants), 2005, Sept. 15

American Institute of Certified Public Accountants. Professional Ethics Executive Committee

The AICPA Professional Ethics Executive Committee (the PEEC, or committee) is exposing for comment a proposed revision to interpretation 101-1, Interpretation of Rule 101, under Rule 101, Independence [ET sec. 101.02], of the AICPAâ€™s Code of Professional Conduct (the Code), and is also exposing for comment the Conceptual Framework for AICPA Independence Standards (Conceptual Framework), which is related to that revision.
Comment Submitted To: President’s Advisory Panel on Federal Tax Reform, Request for Comments #1 (Posed February 16, 2005), March 18, 2005

American Institute of Certified Public Accountants. Tax Division
Comment Letter Regarding Average Professional Fees for Tax Return Preparation.

Thomas J. Purcell III and American Institute of Certified Public Accountants. Tax Executive Committee
Accounting for real estate time-sharing transactions; Statement of position 04-2; Statement of position 04-2

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Proposed statement of position : Accounting by insurance enterprises for deferred acquisition costs on internal replacements;Accounting by insurance enterprises for deferred acquisition costs on internal replacements; Exposure draft (American Institute of Certified Public Accountants), 2004, Nov. 29

American Institute of Certified Public Accountants. Accounting Standards Executive Committee

This Statement of Position (SOP) provides guidance on accounting by insurance enterprises for deferred acquisition costs on internal replacements other than those specifically described in Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of lnvestments. The SOP defines an internal replacement as a modification in product benefits, coverages, or features that occurs by the exchange of a contract for a new contract, amendment, endorsement, or rider to a contract, or the election of a feature within a contract. Modifications that result from the election by the contract holder of a feature, coverage, or a right that was within the original contract are not considered internal replacements for purposes of this guidance as long as all of the conditions listed in paragraph 9 of this SOP are met. The SOP introduces the terms integrated and nonintegrated contract features and specifies that nonintegrated features are evaluated separately from the base contract and that integrated features are evaluated in conjunction with the base contract. Contract modifications involving integrated features are to be evaluated to determine whether the contract has substantially changed as a result of the modification. Contract modifications meeting all of the conditions in paragraph 14 of this SOP result in a replacement contract that is substantially unchanged from the replaced contract and should be accounted for as a continuation of the replaced contract. An internal replacement that is determined to result in a replacement contract that is substantially changed from the replaced contract should be accounted for as an extinguishment of the replaced contract. Unamortized deferred acquisition costs, unearned revenue liabilities, and deferred sales inducement assets from the replaced contract in an internal replacement transaction that results in a substantially changed contract should not be deferred in connection with the replacement contract. Unamortized deferred acquisition costs and the present value of future profits continue to be subject to loss recognition testing in accordance with the provisions of FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises, as amended. The notes to the financial statements should describe the accounting policy applied to internal replacements, including whether or not the company has availed itself of the alternative application guidance outlined in paragraphs 17 and 18 of this SOP and, if so, for which kinds of internal replacement transactions. This SOP is effective for internal replacements occurring in fiscal years beginning after December 15, 2005, with earlier adoption encouraged. Restatement of previously issued annual financial statements is not permitted. Initial application of this SOP should be as of the beginning of an entityâ€™s fiscal year (that is, if the SOP is adopted prior to the effective date and during an interim period, all prior interim periods of the year of adoption should be restated). Disclosure of the effect of the change on the results of operations of the period of change is required. If the financial statements of the year of adoption are presented separately or included in comparative financial statements, the notes to the financial statements should disclose (a) the fact that this SOP has been adopted and the effective date of adoption, and (b) the nature of any differences in accounting p
Auditing the statement of social insurance; Statement of position 04-1; Statement of position 04-1

American Institute of Certified Public Accountants. Auditing Standards Board
Proposed statement of position: Auditing the satement of social insurance; Exposure draft (American Institute of Certified Public Accountants), 2004, March 5

American Institute of Certified Public Accountants. Auditing Standards Board
Omnibus proposal of Professional Ethics Division interpretations and rulings; Exposure draft (American Institute of Certified Public Accountants), 2004, Aug. 9

American Institute of Certified Public Accountants. Professional Ethics Executive Committee

1. PROPOSED ETHICS RULING NO. 112 UNDER RULE 102: Use of a Third-Party Service Provider to Assist a Member in Providing Professional Services; 2. PROPOSED ETHICS RULING NO. 12 UNDER RULES 201 AND 202: Applicability of General and Technical Standards When Using a Third-Party Service Provider; 3. PROPOSED REVISION OF ETHICS RULING NO. 1 UNDER RULE 301: Use of a Third-Party Service Provider to Provide Professional Services to Clients or Administrative Support Services to the Member Computer Processing of Clients' Returns; 4. PROPOSED DELETION OF ETHICS RULING NO. 5 UNDER RULE 301: Records Retention Agency
Comment letters on Proposed Statement of Position “Auditing the Statement of Social Insurance”

American Institute of Certified Public Accountants. Social Insurance Task Force
Proposed statement of position : Auditing the statement of social insurance;Auditing the statement of social insurance; Exposure draft (American Institute of Certified Public Accountants), 2004, March 5

American Institute of Certified Public Accountants. Social Insurance Task Force

This proposed Statement of Position (SOP) was issued to assist CPAs in auditing the statement of social insurance. a financial statement required by Federal Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No. 17, Accounting for Social Insurance, and SFFAS No. 25, Reclassification of Stewardship Responsibilities and Eliminating the Current Services Assessment. In summary, a statement of social insurance is a long-term projection of the present value of the income to be received from or on behalf of existing and future participants of social insurance programs (for example, Social Security), the present value of the benefits to be paid to those same individuals, and the difference between the income and benefits. This proposed SOP: 1. Identifies the sources of authoritative accounting standards for the preparation of the statement of social insurance. 2. Describes the components of the statement of social insurance. 3. Identifies managementâ€™s responsibilities in preparing the statement of social insurance and the estimates underlying it. 4. Identifies the elements included in the process of developing estimates â€”factors, assumptions, data, and models. 5. Describes the auditorâ€™s responsibility when auditing the statement of social insurance, including planning the audit, performing substantive procedures, and reporting on the statement of social insurance. 6. Requires the auditor, in certain circumstances, to obtain the services of an outside actuary to assist in performing procedures that assess (1) the methods and assumptions, of the agencyâ€™s actuary, and (2) whether the findings of the agencyâ€™s actuary are not unreasonable. An outside actuary is an actuary who is not employed or managed by the agency. 7. Contains examples of representations that should be included in a representation letter for an audit of a statement of social insurance. 8. Provides examples of auditorâ€™s reports on the statement of social insurance. 9. Includes an appendix containing examples of: a. Procedures the auditor performs to obtain knowledge about the agencyâ€™s process for developing, evaluating, and incorporating estimates in the statement of social insurance; b. Controls that are relevant to the agencyâ€™s preparation of the statement of social insurance; c. Procedures the auditor performs to test controls and assertions in the statement of social insurance.
Proposed statement on standards for accounting and review services : Performance of review engagements;Performance of review engagements; Exposure draft (American Institute of Certified Public Accountants), 2003, Dec. 11

American Institute of Certified Public Accountants. Accounting and Review Services Committee

The attached is an exposure draft of a proposed Statement on Standards for Accounting and Review Services (SSARS) entitled Performance of Review Engagements. SSARS No. 1, Compilation and Review of Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 100.24-.33), currently provides guidance on analytical procedures, inquiries, and other procedures applicable to a review of financial statements whether prepared under generally accepted accounting principles or a comprehensive basis of accounting other than generally accepted accounting principles. This Statement will revise SSARS No. 1 to expand on previously provided guidance on analytical procedures, inquiries, and other review procedures; to provide inquiries regarding fraud in a review engagement and to require representations regarding fraud in the management representation letter; and to clarify and provide guidance regarding workpaper documentation in a review engagement. The proposed Statement would be effective for reviews of financial statements for periods ending on or after December 15, 2004. The proposed Statement would revise SSARS No. 1.
Proposed statement on standards for accounting and review services : Standards for accounting and review services;Standards for accounting and review services; Exposure draft (American Institute of Certified Public Accountants), 2003, Dec. 11

American Institute of Certified Public Accountants. Accounting and Review Services Committee

The attached is an exposure draft of a proposed Statement on Standards for Accounting and Review Services (SSARS) entitled Standards for Accounting and Review Services. The proposed Statement will establish a SSARS hierarchy. The proposed Statement will be beneficial to practitioners by making them aware of the appropriate literature and the various publications' standing in the SSARS hierarchy. In addition, the Statement addresses a technical correction to SSARS No. 2, Reporting on Comparative Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 200). SSARS currently provide guidance to be followed when the financial statements of a prior period have been compiled or reviewed by a predecessor accountant whose report is not presented and the successor accountant has not compiled or reviewed those financial statements. This Statement will revise SSARS No. 2 (AR sec. 200.17, footnote 9) to conform with the guidance found in Statement on Auditing Standards No. 58, Reports on Audited Financial Statements (AICPA, Professional Standards, vol. 1, AU sec. 508.74, footnote 29), as amended, which states that a successor auditor may name the predecessor auditor if the predecessor auditor's practice was acquired by, or merged with, that of the successor auditor. The proposed Statement would revise SSARS No. 2.
Accounting and reporting by insurance enterprises for certain nontraditional long-duration insurance contracts and for separate accounts; Statement of position 03-01

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Accounting for certain loans or debt securities acquired in a transfer; Statement of position 03-03

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Allowance for credit losses; Exposure draft (American Institute of Certified Public Accountants), 2003, June 19

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Financial highlights of separate accounts : an amendment to the audit and accounting guide audits of investment companies; Statement of position 03-05

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Proposed statement of position: Accounting by insurance enterprises for deferred acquisition costs on internal replacements other than those specifically described in FASB statement no. 97;Accounting by insurance enterprises for deferred acquisition costs on internal replacements other than those specifically described in FASB statement no. 97 ; Exposure draft (American Institute of Certified Public Accountants), 2003, March 14

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Proposed statement of Position : Accounting for real estate time-sharing transactions Accounting for real estate time-sharing transactions; Exposure draft (American Institute of Certified Public Accountants), 2003, Feb. 20

American Institute of Certified Public Accountants. Accounting Standards Executive Committee

This Statement of Position (SOP) provides guidance on a seller's accounting for real estate time-sharing transactions. 1. For a time-sharing transaction to be accounted for as a sale, the transaction should meet the following criteria: a. The seller transfers nonreversionary title to the time-share. b. The transaction is consummated. c. The buyer makes cumulative payments (excluding interest) of at least 10 percent of the sales value of the time-share. d. Sufficient time-shares have been sold to reasonably assure that the units will not become rental property. If the seller does not transfer nonreversionary title, the transaction should be accounted for in the same manner as an operating lease. 2. If a time-sharing transaction accounted for as a sale meets certain criteria, the seller should recognize revenue immediately under the full accrual method. If a transaction accounted for as a sale does not meet those criteria, the seller should delay recognition of revenue. 3. The seller should apply the full accrual method if: a. The time-sharing receivable is not subject to future subordination. b. The seller can demonstrate collectibility of the receivable. c. The seller can estimate credit losses with reasonable reliability. d. Development of the project is complete. 4. The seller should apply the percentage-of-completion method if the first three conditions for full accrual accounting are met but development of the project is not complete. 5. If any of the first three conditions for full accrual accounting is not met but development is complete, the seller should apply the cash-received method. 6. If a transaction previously accounted for under the deposit, cash-received, or combined method of accounting meets the criteria for a "higher" revenue recognition method, the seller should change to the applicable accounting method for that transaction in the period in which the criteria are met. 7. Certain sales incentives the seller provides a buyer to consummate a transaction should be recorded by reducing the stated sales price of the time-share by the excess of the fair value of the incentive over the amount the buyer pays and recording the incentive separately. 8. All costs incurred to sell time-shares should be charged to expense as incurred except for certain costs that are: a. Incurred for tangible assets used directly in selling the time-shares. b. Incurred for services performed to obtain regulatory approval of sales. c. Direct and incremental costs of successful sales efforts under the percentage-of-completion or deposit methods of accounting. 9. The seller should account for cost of sales and time-sharing inventory in accordance with the relative sales value method. 10. The term credit losses should be interpreted broadly to include all situations in which, as a result of credit concerns, a time-share seller collects less than 100 percent of the contractual cash payments of a note receivable, except for certain transfers of receivables to independent third parties by the seller. 11. Rental and other operations during holding periods, including sampler programs and mini-vacations, should be accounted for as incidental operations, which requires that any excess of revenues over costs is recorded as a reduction of inventory cost. 12. The accounting treatment for more complex time-sharing structures such as timesharing special purpose entities (SPEs), points systems, and vacation clubs should be determined using the same sale and revenue recognition guidance as for simpler structures, provided that the time-sharing interest has been sold to the end-user. 13. If the seller, seller's affiliate, or related party operates an exchange, points, affinity, or similar program, the program's operations constitute continuing involvement by the seller, and the seller should determine its accounting based on an evaluation of whether it will receive compensation at prevailing market rates for its program services. 14. A reload transaction is considered to be a separate sale of a second interval, and the accounting for the second interval is determined via application of the sale and revenue recognition guidance of this SOP.
Proposed statement of position : financial highlights of separate accounts : an amendment to the audit and accounting guide audits of investment companies;Financial highlights of separate accounts : an amendment to the audit and accounting guide audits of investment companies; Exposure draft (American Institute of Certified Public Accountants), 2003, July 15

American Institute of Certified Public Accountants. Accounting Standards Executive Committee

This Statement of Position (SOP) provides guidance on reporting financial highlights by separate accounts of insurance enterprises. This SOP requires, among other things, the following: Disclosure of ranges. Separate accounts with more than two levels of contract charges or net unit values per subaccount may elect to present the required financial highlights for contract expense levels that had units issued or outstanding during the reporting period (including number of units, unit fair value, net assets, expense ratio, investment income ratio, and total return) for either: 1. Each contract expense level that results in a distinct net unit value and for which units were issued or outstanding during the reporting period; or 2. The range of the lowest and highest level of expense ratio and total return, and the related unit fair values during each reporting period. The financial highlights table in the separate account's financial statements should state clearly that the expense ratio considers only the expenses borne directly by the separate account and excludes expense incurred indirectly by the underlying funds or charged through the redemption of units. The disclosure should include ranges of all fees that are charged by the separate account and whether those fees are assessed as direct reductions in unit values or through the redemption of units. Expense ratio. The expense ratio represents the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded. The financial highlights note should also provide disclosure of the ranges of all charges assessed to the separate account, including discussion of the manner in which the charges are assessed. Total return ratio. The total return ratio represents the total return for the periods indicated, including changes in the value of the underlying fund, which reflects the reduction of unit value for expenses assessed. The ratio does not include any expenses assessed through the redemption of units. The total return is calculated for the period indicated or from the effective (fund inception) date through the end of the reporting period. Investment income ratio. The investment income ratio represents the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund(s) in which the subaccounts invest. This SOP is effective for annual financial statements issued for fiscal years ending after December 15, 2003, and for interim financial statements issued after initial application. Presentation of previously issued financial highlights on a comparable basis is permitted, but not required. The provisions of this SOP should be applied prospectively from the beginning of the year of adoption.
Proposed statement of position : reporting financial highlights and schedule of investments by nonregistered investment partnerships : an amendment to the audit and accounting guide audits of investment companies and AICPA statement of position 95-2, financial reporting by nonpublic investment partnerships;Reporting financial highlights and schedule of investments by nonregistered investment partnerships : an amendment to the audit and accounting guide audits of investment companies and AICPA statement of position 95-2, financial reporting by nonpublic investment partnerships; Exposure draft (American Institute of Certified Public Accountants), 2003, July 15

American Institute of Certified Public Accountants. Accounting Standards Executive Committee

This Statement of Position (SOP) provides guidance on the application of certain provisions of the AICPA Audit and Accounting Guide Audits of Investment Companies (the Guide) and AICPA SOP 95-2, Financial Reporting by Nonpublic Investment Partnerships, that are directed to the reporting by investment partnerships of financial highlights and the schedule of investments. It amends certain provisions of the Guide and of SOP 95-2 by adapting those provisions to nonregistered investment partnerships based on their differences in organizational and operational structures from registered investment companies. Additionally the SOP incorporates and elevates in authority the guidance provided in previously issued Technical Practice Aids (TPAs) 6910.04 through 6910.10. The guidance in certain TPAs was revised as a result of further deliberations on the above items. Thus the guidance provided by those TPAs is now included in the issues indicated below. The guidance in other TPAs, however, has been carried forward without change. This SOP provides that: 1. Nonregistered investment partnerships, other than those that meet certain criteria as indicated in the next bullet, should calculate and disclose as a financial highlight an annual total rate of return based on a "geometric linking" of performance for each discrete period within a year for which invested capital is constant. 2. Nonregistered investment partnerships that meet the criteria by the terms of their offering document as indicated in the next sentence should calculate and disclose as a financial highlight an internal rate of return since inception for the current and prior accounting period. The partnership criteria are: (1) have limited lives, (2) do not continuously raise capital and are not required to redeem their interests upon investor request, (3) have as a predominant operating strategy the return of the proceeds from disposition of investments to investors, (4) have limited opportunities, if any, for investors to withdraw prior to termination of partnership, and (5) do not invest significantly in market-traded securities. 3. Nonregistered investment partnerships should calculate the denominator of their expense and net investment income ratios based on average net assets (ANA). 4. Nonregistered investment partnerships whose expenses are based on committed capital should provide additional disclosures of the total committed capital of the partnership, the year of formation of the partnership and the year the partnership made its first investment, and the ratio of the total contributed capital to committed capital. 5. Nonregistered investment partnerships should disclose the number of contracts and range of expiration or maturity dates of derivative instruments in the condensed schedule of investments based on whether the fair value (or, for open futures contracts, cumulative appreciation (depreciation)) of a specific type of derivative and underlying (for example, equity index of a particular stock exchange, U.S. Treasury Bond, or natural gas) exceeds 5 percent of net assets, regardless of counterparty. 6. "Funds-of-funds" partnerships should provide certain qualitative disclosures in addition to the name of the investment for investments in nonregistered investment partnerships that exceed 5 percent of net assets. 7. Nonregistered investment partnerships should calculate ANA by using the fund's weighted ANA (as measured at each accounting period) and any other period when capital is contributed or withdrawn. 8. Funds-of-funds and master-feeder funds should calculate net investment income and expense ratios based on the net investment income and expenses reported in the statement of operations. This SOP is effective for annual financial statements issued for fiscal years ending after December 15, 2003, and for interim financial statements issued after initial application. Presentation of previously issued financial highlights on a comparable basis is permitted, but not required. The provisions of the SOP should be applied prospectively from the beginning of the year of adoption.
Reporting financial highlights and schedule of investments by nonregistered investment partnerships : an amendment to the audit and accounting guide audits of investment companies and AICPA statement of position 95-2, financial reporting by nonpublic investment partnerships; Statement of position 03-04

American Institute of Certified Public Accountants. Accounting Standards Executive Committee
Comment Letters on Proposed Statement of Auditing Standards, Sarbanes-Oxley Omnibus Statement on Auditing Standards, April 1, 2003

American Institute of Certified Public Accountants. Auditing Standards Board
Comment Letters on Proposed Statements on Auditing Standards, Amendment to Statement on Auditing Standards No. 95, Generally Accepted Auditing Standards; Audit Evidence; Audit Risk and Materiality in Conducting an Audit; Planning and Supervision; Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement; Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained; and Amendment to Statement on Auditing Standards No. 39, Audit Sampling

American Institute of Certified Public Accountants. Auditing Standards Board
Proposed statement on auditing standards : Sarbanes-Oxley omnibus statement on auditing standards;Sarbanes-Oxley omnibus statement on auditing standards; Exposure draft (American Institute of Certified Public Accountants), 2003, April 1

American Institute of Certified Public Accountants. Auditing Standards Board

This is an edited version of an exposure draft with the same name and date. This proposed Statement on Auditing Standards (SAS) was issued to address certain provisions of the Sarbanes-Oxley Act of 2002 (the Act). This proposed SAS creates a new requirement in the auditing standards for SEC engagements for a review by a reviewing partner (often referred to as a concurring partner) of the audit of financial statements and, where applicable, the review of interim financial information. Previously, these requirements were contained in the rules of the AICPA's SEC Practice Section. This proposed SAS also sets a new requirement for the review by a reviewing partner of the audit of internal control over financial reporting required by the proposed SAS, Auditing an Entity's Internal Control Over Financial Reporting in Conjunction With the Financial Statement Audit. The proposed SAS also amends SAS No. 96, Audit Documentation (AICPA, Professional Standards, vol. 1, AU sec. 339), and SAS No. 100, Interim Financial Information (AICPA, Professional Standards, vol. 1, AU sec. 722), to incorporate a requirement of the Act to retain certain audit and review documentation for a period of seven years from the end of the audit or review period. This requirement is consistent with the final SEC rule entitled Retention of Records Relevant to Audits and Reviews, which was issued in January 2003. This proposed SAS also amends various AU sections to reflect the impact of various provisions of the Act on existing auditing standards.
Proposed statement on auditing standards : Sarbanes-Oxley omnibus statement on auditing standards;Sarbanes-Oxley omnibus statement on auditing standards; Exposure draft (American Institute of Certified Public Accountants), 2003, April 1

American Institute of Certified Public Accountants. Auditing Standards Board

This proposed Statement on Auditing Standards (SAS) was issued to address certain provisions of the Sarbanes-Oxley Act of 2002 (the Act). This proposed SAS creates a new requirement in the auditing standards for SEC engagements for a review by a reviewing partner (often referred to as a concurring partner) of the audit of financial statements and, where applicable, the review of interim financial information. Previously, these requirements were contained in the rules of the AICPA's SEC Practice Section. This proposed SAS also sets a new requirement for the review by a reviewing partner of the audit of internal control over financial reporting required by the proposed SAS, Auditing an Entity's Internal Control Over Financial Reporting in Conjunction With the Financial Statement Audit. The proposed SAS also amends SAS No. 96, Audit Documentation (AICPA, Professional Standards, vol. 1, AU sec. 339), and SAS No. 100, Interim Financial Information (AICPA, Professional Standards, vol. 1, AU sec. 722), to incorporate a requirement of the Act to retain certain audit and review documentation for a period of seven years from the end of the audit or review period. This requirement is consistent with the final SEC rule entitled Retention of Records Relevant to Audits and Reviews, which was issued in January 2003. This proposed SAS also amends various AU sections to reflect the impact of various provisions of the Act on existing auditing standards.
Attest engagements on greenhouse gas emissions information; Statement of position 03-02

American Institute of Certified Public Accountants. Auditing Standards Board; Joint Task Force of the AICPA and CICA on Sustainability Reporting