Publisher's Information

NOVEMBER 2005 VOLUME 200, NUMBER 5

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

AICPA PROPOSES, ADOPTS ETHICS GUIDANCE
The Institute’s Professional Ethics Executive Committee (PEEC) issued an exposure draft (ED) (www.aicpa.org/download/ethics/) proposing an independence standards revision that would require members to use the risk-based approach described in A Conceptual Framework for AICPA Independence Standards (www.aicpa.org/download/ethics/) when considering whether a member-client relationship not specifically addressed by the Code of Professional Conduct “would lead a reasonable person aware of all the relevant facts to conclude that there is an unacceptable threat to the member’s and the firm’s independence.” In addition, if the threat to independence is not at an acceptable level—as described in the framework—the proposal requires members to document the threat and the safeguards applied.

Another exposure draft from the PEEC proposes two new interpretations (www.aicpa.org/download/ethics/2005_0915_ed_indemn.pdf) under Rule 101, Independence (www.aicpa.org/about/code/et_100.html). The first proposal provides guidance on the impact that certain indemnification and limitation of liability provisions may have on a member’s independence when they are included in engagement letters or other client agreements. The second proposal provides guidance on the impact on a member’s independence associated with rendering litigation and forensic accounting services to attest clients. Comments on both EDs are due December 16, 2005.

The PEEC also adopted a new ethics interpretation, 101-15, “Financial Relationships” (www.aicpa.org/download/ethics/interp101_1.pdf), that defines the terms financial interest, direct financial interest and indirect financial interest as used in Ethics Interpretation 101 under Rule 101 (AICPA, Professional Standards, volume 2, ET section 101.01) and provides guidance on determining whether financial interests should be considered direct or indirect.

BANKS GET MORE TIME FOR BROKER COMPLIANCE
The SEC again extended—this time to September 30, 2006—the date by which banks must comply with certain broker registration requirements under the Graham-Leach-Bliley Act (GLBA) (www.sec.gov/news/press/2005-130.htm). Under GLBA, a bank engaging in securities activities must either conduct them through a registered broker-dealer or ensure such activities fall within the limited exceptions to the terms broker and dealer granted banks under the act—which repealed the blanket exception banks formerly held. While the commission considers comments on a proposed regulation to implement the act’s provisions, it continues to postpone the date by which banks must follow interim SEC rules passed earlier.

NO EXTRAORDINARY TREATMENT FOR KATRINA LOSSES
Lawrence W. Smith, chairman of FASB’s Emerging Issues Task Force, said neither the task force nor the board will provide specific accounting guidance for the events related to Hurricane Katrina. He directed CPAs instead to AICPA Technical Practice Aid 5400.05, Accounting and Disclosures for Losses from Natural Disasters—Nongovernmental Entities (www.aicpa.org/members/; see News Digest), which summarizes existing GAAP for issues related to natural disasters.