ACCOUNTING
The AICPA issued a set of technical practice aid questions and answers (TPAs 6910.16–.20) on presentation and disclosure issues facing nonregistered investment partnerships. Another set (TPAs 2130.09–.35) answers questions related to implementing Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. The TPAs are available at www.aicpa.org/members/div/acctstd/general/recent_tpas.asp.

The AICPA Investment Companies Expert Panel developed a revised illustrative report required by the SEC under Form N-SAR that incorporates changes in the definition of material weakness described in PCAOB Auditing Standard no. 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of Financial Statements. The report replaces the version in paragraph 11.16 of the AICPA Audit and Accounting Guide, Investment Companies. It is available at www.aicpa.org/members/div/acctstd/expertpanel_investco.asp.

The IRS issued guidance on how taxpayers can seek permission to change their method of accounting for taxable years ending on or after December 31, 2005, or for certain other periods (www.irs.gov/pub/irs-drop/rp-06-12.pdf).

AUDITING
The ASB has approved for issuance eight statements on auditing standards (SASs) for audits of nonissuers related to risk assessment. These standards address the auditor’s assessment of the risk of material misstatements in financial statement audits and the design of audit procedures responsive to such risks (www.aicpa.org/members/div/auditstd/2005_06_15_risk_assess.htm). The SASs, which will be published in an upcoming issue of the JofA, are effective for audits of financial statements for periods beginning on or after December 15, 2006, with early adoption permitted. This spring the Institute will issue an audit guide that will help practitioners implement the standards.

The new standards are SAS no. 104, Amendment to “Due Professional Care in the Performance of Work” of Statement on Auditing Standards No. 1, Codification of Auditing Standards and Procedures; SAS no. 105, Amendment to Statement on Auditing Standards No. 95, Generally Accepted Auditing Standards; SAS no. 106, Audit Evidence, which will supersede SAS no. 31, Evidential Matter; SAS no. 107, Audit Risk and Materiality in Conducting an Audit, which will supersede SAS no. 47 (with the same title); SAS no. 108, Planning and Supervision, which will supersede “Appointment of the Independent Auditor” of SAS no. 1, Codification of Auditing Standards and Procedures, and SAS no. 22, Planning and Supervision; SAS no. 109, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement; SAS no. 110, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained, which will supersede SAS no. 45, Substantive Tests Prior to the Balance-Sheet Date, and, along with SAS no. 109, also will supersede SAS no. 55, Consideration of Internal Control in a Financial Statement Audit, as amended; and SAS no. 111, Amendment to Statement on Auditing Standards No. 39, Audit Sampling, as amended.

COMPLIANCE
The SEC extended an order it originally issued in 2003 that allows nonpublic broker-dealers to continue filing with the commission balance sheets and income statements—and sending their customers a balance sheet—certified by independent public accountants, rather than by public accounting firms registered with the PCAOB (www.sec.gov/rules/other/34-52909.pdf). The extension is effective for fiscal years that end before January 1, 2007.

FINANCIAL REPORTING
FASB issued as final two staff positions—FSP SOP 94-6-1, Terms of Loan Products That May Give Rise to a Concentration of Credit Risk, and FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans—that clarify and, where necessary, amend earlier guidance. The board also issued a proposed FSP, Amortization and Impairment of Acquired Renewable Intangible Assets. Comments on it are due March 27, 2006. (www.fasb.org/fasb_staff_positions).

GAAP
FASB is codifying U.S. GAAP literature for nongovernment entities into a single authoritative reference that will supersede all existing standards and be available online. The board is seeking researchers’ feedback on the capabilities such a system should have (www.fasb.org).

GOVERNMENT ACCOUNTING
The Governmental Accounting Standards Board (GASB) published a Guide to Implementation of GASB Statement No. 44 on the Statistical Section, which explains in question-and-answer format how the comprehensive annual financial reports of state and local governments should present trend information on financial results, major revenue sources, outstanding debt, economic and demographic indicators and operating activities. To order the guide (# GQA44), go to http://store.yahoo.com/gasbpubs/gqa44.html or call 800-748-0659.

INTERNATIONAL
The International Accounting Standards Board (IASB) amended International Accounting Standard 21, The Effects of Changes in Foreign Exchange Rates, to clarify its requirements and to resolve certain implementation concerns. The IASB also published a discussion paper, Measurement Bases for Financial Accounting—Measurement on Initial Recognition, that was prepared by the staff of the Canadian Accounting Standards Board. Comments on the paper are due May 19, 2006 (www.iasb.org/news).

The International Federation of Accountants (IFAC) released guidance, Establishing and Developing a Professional Accountancy Body, to help governments and others in emerging economies strengthen their national accounting professions. The guidance is available at www.ifac.org/store. In addition IFAC’s International Auditing and Assurance Standards Board issued an exposure draft (ED) of International Standard on Auditing 550 (revised), Related Parties, that proposes enhanced requirements for auditors to consider when auditing related party relationships and transactions. Comments on the ED are due April 30, 2006 (www.ifac.org/News/LastestReleases.tmpl?NID=11363070572201752).

INVESTMENT
The IRS’s revenue ruling 2006-1 clarifies that income from commodity-index derivatives contracts does not help a mutual fund qualify for the usual tax benefits (www.irs.gov/pub/irs-drop/rr-06-01.pdf). The service will apply its newly announced position prospectively so that funds will have enough time to adapt to it and communicate it to their shareholders.

PEER REVIEW
The AICPA published online an article on members’ perceptions of its peer review program and other issues being studied by the Peer Review Task Force—for example, whether review results should be confidential (www.aicpa.org/transparency/member_perceptions.htm). The Institute encourages CPAs in public practice or business and industry to discuss the role peer review has played in their firm’s or business’s development, hiring practices or quality control by sending an e-mail message to previewstories@aicpa.org.

RETIREMENT
The Treasury Department and the IRS made final regulations under IRC sections 401(k) and 401(m) that allow sponsors to design retirement plans in which employees can make designated Roth IRA contributions. As a result, workers can choose to make all or part of their 401(k) deferrals on an after-tax basis, so that the qualified distribution of those contributions and their earnings will be tax-free. The regulations took effect January 3, 2006, and apply to plan years beginning on or after January 1, 2006 (www.treas.gov/press/releases/js3068.htm).

SUCCESSION PLANNING
The AICPA’s PCPS Firm Practice Center is offering practitioners a free white paper, “Preparing for Transition: The State of Succession Planning and How to Handle the Process in Your Firm,” that describes best practices and shows firms how to benchmark their succession plans against those of their peers (www.aicpa.org/pcps). To introduce this and other special resources to practitioners who are not PCPS members, all content on the site is available free to all AICPA members until May 15, 2006. (See “Taking Care of Small Business,” page 39, for more information on AICPA programs for small firms and their small business clients.)

FYI
Robert L. Bunting, AICPA immediate past chair, was appointed to the board of the International Federation of Accountants for a three-year term. In this post he will help determine how the international accountancy profession can best meet its public-interest responsibilities and contribute to worldwide economic growth and stability. Bunting is a partner of Moss Adams LLP and was its chairman and CEO from 1982 to 2004.

The AICPA published Tax Savings Tips for 2005, a brochure practitioners can mail to clients or distribute to audiences when making presentations. It provides information on filing returns, health savings accounts, new tax provisions and tax breaks related to home ownership, saving for retirement and education expenses. In addition to the brochure, firms have access to a speech and a PowerPoint presentation to help clients prepare for this tax season. Other available resources include tools and information practitioners can use to promote their practices and services (www.aicpa.org/cpamarketing).

The IRS Web site’s new AMT Assistant helps taxpayers determine whether they are subject to the alternative minimum tax—usually in less than 10 minutes (http://apps.irs.gov/app/amt).

The Financial Accounting Foundation, the parent body of FASB and GASB, appointed CPA Timothy P. Flynn, chairman and CEO of KPMG LLP, to the foundation’s board of trustees.

The Federal Accounting Standards Advisory Board (FASAB) sponsors—John W. Snow, Treasury secretary; Joshua B. Bolton, Office of Management and Budget director; and David M. Walker, U.S. comptroller general—selected Tom L. Allen to succeed David Mosso as FASAB chairman on January 1, 2007. Until then, Allen will serve as a nonfederal member of the board. The sponsors authorize accounting and financial reporting standards for federal entities.