Editorial Staff

Publisher/Editor-in-Chief
Colleen Katz

Project Team Leader
Geoffrey L. Pickard

Managing Editor
Cheryl Rosen

Senior Editors
Laura Baron
Katharine W. Coveleski
Peter D. Fleming
Michael Hayes
James Quaglietta
Robert Tie

Senior Assistant Editor
Sarah Cobb

Assistant Editor
Vince Nolan

Contributing Editors
Anita Dennis
Lesli S. Laffie
Joan Mancuso
Barbara J. Shildneck
Joseph T. Wells
Stanley Zarowin

Production Director
Peter M. Tuohy 

Art Director
Jeryl A. Costello

Production Manager
Gene Cioffi

Senior Manager—
Production Services—
Publishing Technology
Robert DiCorcia

Production Editor
D. Hillel Lofaso

Senior Production Associates
Valrie Mason, Ingrid Medina

Associate Publisher
Thomas R. Greve

Advertising Team Manager
Karin DeMarco

Advertising Representatives
Larry Hookey, Joseph Torres

Advertising Coordinator
John Weinberg

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Highlights

REGULATORS ADDRESS INTERNAL CONTROL COSTS
The SEC and the Public Company Accounting Oversight Board (PCAOB) responded to concerns expressed during an April SEC roundtable discussion on implementing the Sarbanes-Oxley Act’s internal control provisions. Domestic and foreign public company representatives, auditors, investors and others said the act’s requirements had improved financial reporting controls. Much of the discussion centered on the present and future costs and benefits of complying with section 404 of the act. In response, the SEC published Staff Statement on Management’s Report on Internal Control Over Financial Reporting (www.sec.gov/info/accountants/stafficreporting.htm), which emphasizes management’s responsibility for tailoring the type and extent of controls to a reporting entity’s needs, thereby maximizing the cost-efficiency and effectiveness of controls. To complement the SEC guidance, the PCAOB, on May 16, 2005, issued a board policy statement and additional questions and answers (Qs&As) for auditors on Auditing Standard no. 2, An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements, supplementing those it published in 2004 and earlier this year (www.pcaobus.org/standards/).

COUNCIL MOVES AHEAD ON PRIVATE COMPANY FINANCIAL REPORTING
The Institute’s governing council passed a resolution announcing the profession’s intent to work with FASB and its parent organization, the Financial Accounting Foundation (FAF), to evaluate potential changes to GAAP for privately held, for-profit companies as recommended by the Private Company Financial Reporting Task Force (www.aicpa.org/members/div/acctstd/). The resolution directs the AICPA to work with FASB and the FAF to identify and implement a process that would evaluate, where appropriate, potential changes in recognition, measurement and disclosure differences from current GAAP as applied by public companies.

AMT HAS OUTLIVED ITS USEFULNESS
The AICPA said it backs the Alternative Minimum Tax Repeal Act of 2005 (HR 1186; http://thomas.loc.gov), a bill introduced by Rep. Phil English (R-Pa.). Thomas J. Purcell III, CPA, chairman of the AICPA Tax Executive Committee, said that although the individual AMT was initially targeted to the wealthiest taxpayers, it can now affect even lower-middle-income Americans. He noted that the corporate AMT burdens struggling companies by requiring them to keep at least two sets of books and to deal with the complexities of a second tax system.

AICPA SUPPORTS PRIVACY LEGISLATION
The Institute applauded bipartisan House legislation, the Privacy Protection Act of 2005 (HR 2387; http://thomas.loc.gov), introduced by Representatives Mark R. Kennedy (R-Minn.) and Collin C. Peterson (D-Minn.) to amend the privacy provision of the Gramm-Leach-Bliley (GLB) Act applicable to CPAs. Barry C. Melancon, CPA, AICPA president and CEO, said the bill aims to relieve CPAs, especially sole practitioners and small firms, of a “substantial, unnecessary regulatory burden.” GLB’s privacy provisions duplicate preexisting laws requiring practitioners to maintain the privacy of clients’ nonpublic financial information.

Editorial Advisers

Catherine Allen, Kenneth D. Askelson, James Bean, John C. Boma, Steven J. Brown, Jolene C. Brucks, Thomas F. Burrage, Linda Burt, J. Gregory Bushong, R. Patrick Cargill, Benson J. Chapman, Rosemarie T. Dunn, Thomas Emmerling, Elizabeth Fender, Robert J. Freeman, Kim Gibson, Alan Glazer, Randi K. Grant, Patrick T. Hanratty, DeAnn Hill, James E. Hunton, Sandra Johnigan, Susan S. Jones, Frank J. Kopczynski, Jeffrey B. Kraut, Dennis B. Kremer, Alan Levin, John Lewison, Joseph P. Liotta, Mano Mahadeva, Benjamin F. Mathews, David McIntee, Anita Meola, Debra Mitchell, Roger H. Molvar, Brenda Morris, Craig Murray, Glenn Newman, Lyne P. Noella, Edward T. Odmark, Mary P. Ricciardello, Mark L. Richardson, Marshall B. Romney, Peggy Scott, Carolyn Sechler, Gary Shamis, Ivan J. Sotomayor, Alan Steiger, Paul C. Sullivan, Barry S. Sziklay, Gary R. Trugman, Robert Willens, Mark A. Yahoudy, Alan S. Zipp