Subject to approval by the Securities and Exchange Commission, the Public Company Accounting Oversight Board adopted PCAOB Auditing Standard no. 3, Audit Documentation; an amendment to a related interim auditing standard on documentation; and two rules ( www.pcaobus.org/pcaob_news_2004-06-09.asp ). One rule sets forth the terminology the PCAOB will use to describe the degree of responsibility its auditing and related professional practice standards impose on auditors and the other relates to the oversight of non-U.S. public accounting firms ( www.pcaobus.org/pcaob_rulemaking.asp ).

The staff of the PCAOB issued a series of questions and answers relating to Auditing Standard no. 1, References in Auditors’ Reports to the Standards of the Public Company Accounting Oversight Board ( www.pcaobus.org/documents/Staff_Q_and_A/ ). The Q&A provides guidance for financial statement audits of nonissuers.

The auditing standards board (ASB) issued two interpretations of Statement on Auditing Standards (SAS) no. 58 , Reports on Audited Financial Statements . Interpretation 17 provides illustrative language in the auditor’s report to clarify that an audit performed in accordance with generally accepted auditing standards (GAAS) does not require the same level of testing and reporting on internal control over financial reporting as an audit of an issuer for whom section 404 of the Sarbanes-Oxley Act of 2002 is applicable. Interpretation 18 clarifies the applicability of GAAS and provides illustrative language for an audit conducted in accordance with both GAAS and PCAOB auditing standards. The interpretations are available at www.aicpa.org/members/div/auditstd . (See also Official Releases in the August issue of the JofA , page 92.

The Institute published a new edition of AICPA Professional Standards, which contains AICPA and PCAOB pronouncements issued through June 1, 2004. These include auditing guidance—GAAS for private-company audits and PCAOB standards for audits of public companies and certain other entities when prescribed by the rules of the SEC—as well as AICPA and PCAOB standards on professional ethics, independence and quality control relating to nonpublic and public entities. The volume (product no. 005104JA), which also identifies differences between the two bodies’ standards, is available at www.cpa2biz.com .

The Association of Certified Fraud Examiners (ACFE) issued its 2004 Report to the Nation on Occupational Fraud and Abuse ( www.cfenet.com/report ). Based on a survey of certified fraud examiners from late 2003 through early 2004, the report analyzes more than 500 cases representing a loss of $761 million to U.S. companies. Survey respondents estimated an organization typically loses 6% of its annual revenue to fraud. In 2003, based on the gross domestic product, the total loss due to occupational fraud can be estimated at $660 billion.

The Governmental Accounting Standards Board (GASB) issued two exposure drafts (EDs). One, Net Assets Restricted by Enabling Legislation—an Amendment of GASB Statements no. 34 and 44, proposes standards intended to clarify for preparers of state and local government financial statements the requirements for reporting net assets contained in GASB Statement no. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments. If enacted, the proposed statement would become effective for periods beginning after June 15, 2005. Comments on the ED were due August 31. The other ED, a proposed statement of governmental accounting concepts, Communication Methods, would provide a conceptual basis for selecting ways to present items of information within general purpose external financial reports that contain basic financial statements. Comments are due September 30. Each ED can be downloaded for a $15 fee at http://store.yahoo.com/gasbpubs/publications-exposure-drafts.htm .

PCPS—the AICPA Alliance for CPA Firms—and the Texas Society of Certified Public Accountants launched the 2004 Management of an Accounting Practice Survey. The Association for Accounting Administration and firms from 43 states are participating in the online survey. Information is available at http://map.pcps.org . The survey, which provides local and regional firms with benchmarking information on management policies and financial results, will continue until September 3, and results will be announced in October.

PCPS—the AICPA Alliance for CPA Firms—and the Texas Society of Certified Public Accountants launched the 2004 Management of an Accounting Practice Survey. The Association for Accounting Administration and firms from 43 states are participating in the online survey. Information is available at http://map.pcps.org . The survey, which provides local and regional firms with benchmarking information on management policies and financial results, will continue until September 3, and results will be announced in October.

Ralph E. Kent of Durham, North Carolina, died on June 26, 2004. He served as president—the title then held by the Institute’s highest ranking volunteer—for the 1968–69 committee year and then as a life member of the AICPA council until the time of his death.

A distinguished member of the profession, Kent also was the first president of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board, and served for 16 years on the consultant panel of the Comptroller General of the United States.

Kent retired from Arthur Young (now Ernst & Young) in 1977 after a 40-year career with the firm. During his last 18 years there, he was a senior partner and a managing partner. He also served for 12 years as the first chairman of Arthur Young International. His wife, Betty K. Kent, survives him, as do his two sons and grandson.