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EDUCATION
The AICPA has created an associate membership category for college and university accounting faculty who are not CPAs. Non-CPA faculty members are eligible for a one-year subscription to the AICPA’s Core Library, access to the AICPA’s Technical Information and Professional Ethics Hotlines, a discount on AICPA products, complimentary subscriptions to the Journal of Accountancy and The CPA Letter, and access to AICPA insurance and retirement programs. Non-CPA faculty members will not be able to vote on member ballots. Dues are $185 a year. Applications are available at www.aicpa.org/aec.

State CPA societies and individuals are invited to nominate an accounting educator for the 2007 AICPA Distinguished Achievement in Accounting Education Award. This award recognizes full-time college accounting educators distinguished for excellence in teaching and for national prominence in the accounting profession. Nominations are due February 1, 2007. For details, e-mail Heather Bunning at hbunning@aicpa.org.

EMPLOYEE BENEFITS
The U.S. Department of Labor clarified how employers can offer health savings accounts (HSAs) to employees without triggering Employee Retirement Income Security Act (ERISA) requirements. Field Assistance Bulletin 2006-02 (www.dol.gov/ebsa/regs/fab_2006-2.html) explains some points that have continued to draw questions from employers since a bulletin two years ago (2004-01).

The latest guidance clarifies that HSAs do not constitute employee benefit plans under ERISA even when employers pay account fees on behalf of employees, or when employers open accounts for employees and deposit funds without asking employees’ consent.

ENFORCEMENT
The Federal Election Commission (FEC) released for comment a proposed enforcement policy about reporting errors made by campaigns and other political committees that stem from embezzlement of funds by committee officials. A companion document proposes internal controls political committees could use to guard against embezzlement. Under the proposed policy, committees that implement certain minimum safeguards would not be held liable by the FEC if a misappropriation led to reporting errors.

The proposal is in response to a recent increase in the number of enforcement cases involving misappropriation of committee funds, often by committee employees. The FEC could implement the policy as early as this month, said FEC Audit Division Director Joseph Stoltz.

The proposed policy and the internal controls document are available at www.fec.gov/law/policy/embezzlepolicy.pdf.

ETHICS
The Public Company Accounting Oversight Board pushed back a key implementation date for an aspect of PCAOB Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles. Under the old implementation schedule, the rule was not to apply to tax services being provided pursuant to an engagement in process on April 19, 2006, so long as the services were completed on or before October 31, 2006. Under the revised implementation schedule, the board will not apply the rule to tax services provided on or before April 30, 2007, when those services are provided during the audit period and are completed before the professional engagement period begins.

The PCAOB pushed back the implementation date after it decided to revisit the parts of the rule that deal with tax services provided during the period before a registered public accounting firm becomes auditor of record for an audit client.

For more information visit www.pcaobus.org/Rules/Docket_017.

FINANCIAL REPORTING
The AICPA Accounting Standards Executive Committee (AcSEC) commented favorably on a partial draft of a conceptual framework for financial reporting being developed jointly by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The framework, which consists of a common set of principles for developing accounting standards, is a key part of the boards’ moves toward convergence of their respective standards.

The FASB preliminary views document, titled Conceptual Framework of Financial Reporting: Objective of Financial Reporting and Qualitative Characteristics of Decision-Useful Financial Reporting Information, consists of the framework’s first two chapters. They deal with the objectives of financial reporting and the qualitative characteristics of financial reporting information that are useful in decision making, such as relevance, faithful representation, comparability and understandability.

AcSEC agreed with many of the draft’s provisions but made 10 recommendations, including that less complexity should be accorded a higher value in the conceptual framework. In addition, AcSEC said FASB should provide a more robust framework for how preparers and auditors should assess materiality.

To review the joint conceptual framework, visit www.fasb.org/project/conceptual_framework.shtml.

For the next phase of the project, FASB and IASB will hold roundtable discussions on measurement, concerning the value of assets and liabilities in financial reporting. The discussions, which will take place in Hong Kong, London and Norwalk, Conn., will focus on the list of measurement issues identified in the plan for the project’s measurement phase, the initial inventory of potential measurement bases prepared by the project staff and the terminology associated with that inventory.

FRAUD
Lender reports of mortgage loan fraud are up 35% in the first quarter of 2006 over the same period in 2005, according to the Financial Crimes Enforcement Network (www.fincen.gov). Moreover, instances of mortgage loan fraud constituted nearly 5% of all suspicious activity reports filed by depository institutions with FinCEN in 2005, up from 2% in 1997. The agency is unclear whether the rise in mortgage-loan-fraud reports is due to an increase in fraudulent loans or in awareness of the activity.

Identity fraud was the most common type of mortgage fraud (23% of cases sampled), followed by misrepresentation of loan purpose (12%), appraisal fraud (11%) and straw buyers (3%). Emerging trends included “renting” assets to qualify for loans (less than 1% of cases).

GOVERNMENT ACCOUNTING
The Federal Accounting Standards Advisory Board (FASAB) is seeking comment on a proposal to change when a liability and corresponding expense are recognized for benefits under Social Security, Medicare and other federal social insurance programs. Currently, under Statement of Federal Financial Accounting Standard (SFFAS) no. 17, recognition occurs when a program participant meets all eligibility requirements and benefit payments become due and payable. Three FASAB members favor retaining that standard, while six others, including Chairman David Mosso, would recognize a liability and expense when participants become fully insured—for Social Security and Medicare, after 40 quarters of covered employment. One member abstained from expressing his views but supported releasing the document for comment. A preliminary views document analyzing the two positions is titled Accounting for Social Insurance, Revised. The document is available at www.fasab.gov/exposure.html. The deadline for comments is April 16, 2007.

GASB has published the 2006–2007 edition of its Comprehensive Implementation Guide. Besides consolidating and updating previous guides, the new edition includes first-time implementation guides to GASB Statements no. 44, Economic Condition Reporting: The Statistical Section—an amendment of NCGA Statement 1; no. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans and no. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. It is available at www.gasb.org or by calling 800-748-0659.

FASAB issued a Statement of Federal Financial Accounting Standards (SFFAS) to clarify and standardize reporting of fiduciary activities by federal entities over nonfederal assets. The board approved SFFAS no. 31, Accounting for Fiduciary Activities (www.fasab.gov/pdffiles/sffas_31.pdf), in April 2006.

Previously, fiduciary activities—in which the federal government receives and manages cash or other assets on behalf of a nonfederal individual or entity—weren’t clearly defined or distinguished from federal program activities, FASAB Chairman David Mosso said. SFFAS no. 31 takes effect September 30, 2008.

To help standardize how governments designate funds and report fund balances, GASB issued for comment Fund Balance Reporting and Governmental Fund Type Definition (http://www.gasb.org/exp/ITC_Fund_Balance_Reporting.pdf). The document proposes to redefine government fund types to clarify their purposes and suggests three alternative models for classifying components of fund balances. Comments can be made at www.gasb.org/survey/cgi-bin/fbr.html by January 31, 2007.

INTERNATIONAL
The International Public Sector Accounting Standards Board of the International Federation of Accountants (IFAC) issued an exposure draft of a proposed new International Public Sector Accounting Standard (IPSAS) on employee benefits. ED 31 is based on IAS no. 19, Employee Benefits, and addresses short-term employee benefits, post-employment benefits, other long-term employee benefits and termination benefits. Comments may be e-mailed to publicsectorpubs@ifac.org by February 28, 2007. The draft is available at www.ifac.org/EDs.

The World Federation of Exchanges (WFE) endorsed the processes the International Auditing and Assurance Standards Board (IAASB) uses for establishing international standards on auditing (ISAs), according to a statement by IFAC. The WFE represents 57 securities and derivative markets that account for more than 97% of world stock market capitalization. More than 100 countries have adopted or incorporated ISAs into their national auditing standards or use ISAs as a basis for preparing national auditing standards. All IAASB standards and guidance are available free from IFAC at www.ifac.org/store.

FYI
Former AICPA board chairman Robert L. Bunting was elected deputy president of the International Federation of Accountants (IFAC) in November 2006. Under the IFAC constitution, the deputy president becomes president after serving for two years. Bunting succeeds Juan José Fermín del Valle of Argentina, who is now IFAC president. Bunting joined the IFAC board in November 2005. He is a partner at Seattle-based Moss Adams LLP, where he served as chairman and CEO from 1982 to 2004.

The SEC’s Office of the Chief Accountant is seeking up to three professional accounting fellows to help develop proposed securities rules, work with standard setters in accounting and auditing, and consult with filers on reporting matters. The unpaid fellowships are for two years beginning June 2007. For two positions, the SEC prefers candidates with experience applying U.S. GAAP or International Financial Reporting Standards; candidates for the third position should have experience in analyzing and implementing auditing and other standards. Applications are due by January 19, 2007. For information, call Mark Barrysmith at 202-551-5304 or Josh Jones at 202-551-5334.

arilyn A. Pendergast, CPA, received the Sempier Award for outstanding contributions to the international accountancy profession at the 17th World Congress of Accountants held November 13–16 in Istanbul, Turkey. The award, which is presented by the International Federation of Accountants (IFAC) every four to five years, is named after Robert Sempier, the first executive director of IFAC. Pendergast, who is only the fourth person to receive the award, was selected from among nominations by IFAC’s 160 member bodies in 120 countries. A former member of the AICPA board of directors, Pendergast has been the chair of both the AICPA Professional Ethics Executive Committee and the IFAC Ethics Committee. While serving on the IFAC Ethics Committee, she led a restructuring of the IFAC Code of Ethics for Professional Accountants, including the adoption of a principles-based approach to independence. “Marilyn’s international accomplishments serve as a model for what IFAC espouses in terms of professional conduct and technical proficiency with contributions to the profession that transcend national boundaries,” wrote AICPA President and CEO Barry Melancon in an April nominating letter. Pendergast, who also was the first female president of the New York State Society of CPAs, is a senior partner with the Albany, N.Y.-based accounting firm UHY LLP.