Editorial Staff

Publisher/Editor-in-Chief
Colleen Katz

Managing Editor
Elizabeth Uva

Senior Editors
Katharine W. Coveleski
Laura Fischer
Peter D. Fleming
Michael Hayes
Robert Tie
Cynthia Waller Vallario
Stanley Zarowin

Assistant Editors
Sarah Cobb,Vincent Nolan

Contributing Editors
Anita Dennis, Lesli S. Laffie
Joan Mancuso, Barbara J. Shildneck

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

Art Assistant
Patricia L. Arrington

Associate Publisher
Thomas R. Greve

Advertising Team Manager
Karin DeMarco

Advertising Representatives
Gwenn M. Paness
Joseph Torres 

Advertising Coordinator
John Weinberg

Editorial Offices
201-938-3292
e-mail: joaed@aicpa.org

Advertising Office
201-938-3767

Classified Ads
Sherry Plant 1-800-237-9851

Highlights

AICPA LAUNCHES ASSAULT ON FRAUD
This month the AICPA auditing standards board (ASB) took a major step forward in the fight against fraud by releasing Statement on Auditing Standards (SAS) no. 99, Consideration of Fraud in a Financial Statement Audit, superseding SAS no. 82. The two statements bear the same title, but SAS no. 99 provides more comprehensive guidance—in terms of proactive fraud prevention and deterrence—than its predecessor did. Part of a broad AICPA anti-fraud initiative, the new statement encourages auditors to be more alert to indications and underlying methods of various types of deception, such as fraudulent financial reporting and misappropriation of assets.

While SAS no. 99 is effective for audits of periods beginning on or after December 15, 2002, the ASB recommends that—in recognition of the urgent need for an improved response to fraud—auditors implement certain of its provisions in time for upcoming yearend audits. For example the statement requires audit team members to discuss the risk and potential means—such as management’s overriding of antifraud controls—by which fraud could lead to material misstatement. SAS no. 99 also advises auditors to collaborate with forensic specialists in planning the audit, designing audit tests likely to detect fraud and structuring scripts for questioning personnel.

The SAS can be obtained from the AICPA at 888-777-7077.

Another part of the Institute’s antifraud campaign involves its establishment—in conjunction with the University of Texas at Austin and the Association of Certified Fraud Examiners—of an Institute for Fraud Studies, which will provide investors with practical advice on how to recognize and protect themselves from fraud.

In addition, the AICPA is designing—and in June will issue—antifraud criteria and controls for public companies. It also urges stock exchanges to mandate antifraud training for corporate managers, boards of directors and audit committees. And it is initiating discussions with the American Accounting Association, the Federation of Schools of Accountancy and other educational groups to incorporate antifraud instruction into courses and textbooks.

NORTH AMERICAN PRACTICE BARRIERS TO BE LOWERED
The United States, Canada and Mexico agreed in September to mutually recognize the substantial equivalency of each nation’s professional accounting designations: the CPA, the CA (chartered accountant) and the CPC (contador publico certificado), respectively. The United States and Canada signed a similar professional mutual recognition agreement in 1991.

Under the new accord, which will take effect once it is ratified by the NAFTA Free Trade Commission, individuals holding any of these designations will be allowed to practice in either of the other countries after demonstrating—through an examination—an understanding of the differences between their own national accounting systems and principles and those of the other country.

Editorial Advisers

Kenneth D. Askelson, James Bean, Robert C. Beheler, Phyllis Bernstein, John C. Boma, Jacob R. Brandzel, Steven J. Brown, Jolene C. Brucks, Thomas F. Burrage, Linda Burt, J. Gregory Bushong, R. Patrick Cargill, Benson J. Chapman, Susan M. Comeau, Rosemarie T. Dunn, Thomas Emmerling, Elizabeth Fender, Penny A. Flugger, Barton C. Francis, Robert J. Freeman, John S. Gibbons, Alan Glazer, Randi K. Grant, Patrick T. Hanratty, James E. Hunton, Frank J. Kopczynski, Jeffrey B. Kraut, Dennis B. Kremer, William F. Laurie, Alan Levin, John Lewison, Joseph P. Liotta, Mano Mahadeva, Benjamin F. Mathews, Patrick Michael McDonough, Anita Meola, Debra Mitchell, Roger H. Molvar, Brenda Morris, Bea L. Nahon, Lyne P. Noella, Edward T. Odmark, Stanley Person, Mary P. Ricciardello, Mark L. Richardson, Wesley Riemer, Marshall B. Romney, David Satava, Peggy Scott, Carolyn Sechler, Gary Shamis, Ivan J. Sotomayor, Alan Steiger, Paul C. Sullivan, Keith Tobias, Gary R. Trugman, Robert Willens, Jon Arthur Wise, Mark A. Yahoudy