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The AICPA in May released a practice aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, that provides useful information on measuring the cost of such transactions and properly reflecting them in company financial statements. Copies (product no. 006617JA) are available from the AICPA at 888-777-7077 or www.cpa2biz.com.

The Public Company Accounting Oversight Board established the Office of Internal Oversight and Performance Assurance in March (www.pcaobus.org/pcaob_news_2004-03-17.asp). The office’s staff will conduct internal reviews of the board’s programs and operations to help ensure their integrity and effectiveness.

The Federal Financial Institutions Examination Council (FFIEC) in March issued the Retail Payment Systems Booklet, which contains revised guidance for examiners, financial institutions and technology service providers on risks associated with retail payment systems (www.ffiec.gov/ffiecinfobase/html_pages/it_01.html). It is the latest in a series of updates to the 1996 FFIEC Information Systems Examination Handbook. Established in 1979 to prescribe uniform principles, standards and report forms and to promote uniformity in the supervision of financial institutions, the council (www.ffiec.gov) comprises the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

The Treasury Department and the IRS issued guidance on health savings accounts (HSAs) (www.treas.gov/press/releases/js1278.htm) to increase health-insurance-plan designers’ and consumers’ understanding of the IRS rules governing such plans. HSAs are tax-exempt trust or custodial accounts established exclusively to pay the qualified medical expenses of an eligible individual participating in a high-deductible health plan (HDHP) whose coverage provisions satisfy related IRS requirements. The guidance clarifies the types of preventive care an HDHP covers and the interaction between it and other prescription drug benefit plans.

The SEC issued a proposal to amend its requirements relating to rule changes requested by self-regulatory organizations (SROs), such as the securities and commodities exchanges (www.sec.gov/rules/proposed/34-49505.htm). The proposal aims to modernize and increase the efficiency of the rule-filing process by requiring SROs to submit recommended changes to the commission only in electronic form and to post all proposed modifications—as well as current and complete sets of their rules—on their Web sites. Comments are due June 4.

The General Accounting Office (GAO) in March issued a clarification (www.gao.gov/govaud/cpeamend.htm) of its earlier issued requirement that auditors working under Generally Accepted Government Auditing Standards (GAGAS) (collectively known as the Yellow Book) complete every two years at least 80 hours of continuing professional education (CPE) that directly enhances their professional proficiency in performing audits and/or attestation engagements. The guidance responds to practitioners’ questions as to whether—under the GAO’s June 2003 revision of GAGAS—auditors are permitted to satisfy any of the 80-hour CPE requirement by taking taxation courses. In return the GAO said that because such instruction would not—with certain exceptions—help improve auditors’ requisite skills, it generally would not satisfy GAGAS CPE requirements, which became effective for financial audits and attestation engagements of periods ending—and for performance audits beginning—on or after January 1, 2004.

The International Accounting Standards Board (IASB) in March issued international financial reporting standards (IFRS) 3, Business Combinations; 4, Insurance Contracts; and 5, Non-current Assets Held for Sale and Discontinued Operations (http://shop.iasb.org.uk/cmt/0001.asp). In conjunction with its issuance of IFRS 3, the IASB also revised international accounting standards (IAS) 36, Impairment of Assets, and 38, Intangible Assets; together they require, among other things, that all business combinations within the scope of IFRS 3 be accounted for using the purchase method and that the pooling-of-interests method no longer be used. IFRS 4 provides the first international guidance on insurance contracts, and IFRS 5 is the initial standard resulting from the IASB’s joint project with the Financial Accounting Standards Board to reduce differences between IFRSs and GAAP. The standards will take effect when individual jurisdictions adopt them. To date several of these authorities—including Australia, the European Union and Russia—have said they would require observance of international standards on or before January 1, 2005.

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in April proposed changes to its current Form 105, Report of International Transportation of Currency and Monetary Instruments (www.fincen.gov/cmirforms60-day.pdf). The revision would facilitate law enforcement by obtaining additional information about the movement of currency and monetary instruments. FinCEN would achieve this by converting its existing report into two documents: Form 105, Report of International Transportation of Currency and Monetary Instruments—Accompanied by an Individual, and Form 106, Report of International Transportation of Currency and Monetary Instruments—Shipment, Mailing, or Receipt. Comments are due June 8.

The International Federation of Accountants (IFAC) in March issued Anti-Money Laundering—2nd Edition, a paper addressing the profession’s role in detecting money laundering and implementing controls to prevent it. The publication, which includes a compendium of relevant guidance, is available free of charge from IFAC at www.ifac.org/Store/Details.tmpl?SID=101043515678981. Its original edition appeared in January 2002.

The PCAOB appointed Claudius B. Modesti director of investigations and enforcement in May. Previously he held positions in the U.S. Attorney’s office, the Justice Department and the SEC.

Six practitioners begin two-year terms this month as professional accounting fellows in the SEC’s Office of the Chief Accountant. The appointees, all of whom are senior managers at their respective CPA firms, are Shan L. Benedict of BDO Seidman, Jennifer M. Burns of Deloitte & Touche, Mark A. Northan and Brian K. Roberson of KPMG, Nancy L. Salisbury of Ernst & Young and Pamela R. Schlosser of PricewaterhouseCoopers. They will develop rule proposals under federal securities laws, communicate with professional accounting and auditing standard-setting bodies and consult with SEC-registered companies on accounting and reporting matters.