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Accounting Research Manager(TM)
Weekly Summary of Developments
July 27-31, 2009
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Accounting Research Manager subscriber,

The Accounting Research Manager database now contains this week's weekly summary of developments. Click the link below to access and print the fully-formatted Weekly Summary:

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If you do not have immediate Internet access to the Accounting Research Manager database, below is the text of this week's Weekly Summary.

Accounting and SEC Headlines

FASB and IASB Joint Board Meeting -- Meeting Summary
Financial Crisis -- Financial Crisis Advisory Group Publishes Recommendations
IFRS for First Time Adopters -- Amendment to IFRSs for First-Time Adopter
Short Sales -- SEC Moves to Curtail Abusive Short Sales
Updated EDGAR Filer Manual -- SEC Adopts Updated EDGAR Filer Manual
New Standard on Engagement Quality Review -- PCAOB Adopts Auditing Standard No. 7
Concept Release Requiring Engagement Partner to Sign Audit Report -- PCAOB Seeking Comments

Auditing and Internal Controls Headlines

New Standard on Engagement Quality Review -- PCAOB Adopts Auditing Standard No. 7
Concept Release Requiring Engagement Partner to Sign Audit Report -- PCAOB Seeking Comments


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ACCOUNTING AND SEC HEADLINES:
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FASB and IASB Joint Board Meeting -- Meeting Summary
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As reported in its "Summary of Board Decisions" publication, the FASB and IASB met on July 23 and 24, 2009, and discussed the following matters:

-Technical plan - The Boards discussed the plans for the projects that they are deliberating together;

-Insurance contracts - The Boards discussed which of the two remaining candidate measurement approaches for insurance contracts should be selected: (1) a measurement approach based on the approach being developed in the IASB’s project to amend IAS 37, Provisions, Contingent Liabilities and Contingent Assets; and (2) a current fulfillment value without an explicit risk margin;

-Revenue recognition - The Boards considered a summary of the responses to the Discussion Paper, Preliminary Views on Revenue Recognition in Contracts with Customers. After reviewing those responses, the Boards affirmed the objective of the project to develop a single revenue recognition model for IFRSs and U.S. GAAP that can be applied consistently across various industries and transactions;

-Leases - The Boards discussed lessor accounting and how an asset for its right to receive rental payments from the lessee and a liability for its performance obligations under the lease should be measured;

-Financial instruments with characteristics of equity - The Boards discussed the costs of capital approach to displaying, in the statement of comprehensive income, the changes in the fair value of a liability instrument;

-Financial statement presentation - The Boards considered a summary of the responses to the Discussion Paper, Preliminary Views on Financial Statement Presentation. After reviewing those responses, the Boards affirmed the objective of the project to develop a single presentation model for IFRSs and U.S. GAAP that can be applied consistently across all types of business entities; and

-Financial instruments - improvements to recognition and measurement - The Boards updated each other on their respective proposed classification and measurement approaches for financial instruments.

Financial Crisis -- Financial Crisis Advisory Group Publishes Recommendations
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The Financial Crisis Advisory Group (Advisory Group), a high level group of experienced leaders representing international financial markets, has published its recommendations related to accounting standard-setting activities and other changes to the international regulatory environment following the global financial crisis. The Advisory Group was formed at the request of the IASB and the FASB to consider financial reporting issues arising from the crisis, and has met six times in 2009.

The Advisory Group report asserts that while accounting standards were not a root cause of the financial crisis, they have an important role to play in resolving the crisis. The report sets out four main principles and contains a series of recommendations to improve the functioning and effectiveness of global standard-setting. The chief areas addressed in the report are:

-Effective financial reporting;
-Limitations of financial reporting;
-Convergence of accounting standards; and
-Standard-setters’ independence and accountability.

IFRS for First Time Adopters -- Amendment to IFRSs for First-Time Adopters
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The IASB issued amendments to International Financial Reporting Standards (IFRS) 1, First-time Adoption of International Financial Reporting Standards. The amendments address the retrospective application of IFRSs to particular situations and are aimed at ensuring that entities applying IFRSs will not face undue cost or effort in the transition process.

The amendments: (a) exempt entities using the full cost method from retrospective application of IFRSs for oil and gas assets; and (b) exempt entities with existing leasing contracts from reassessing the classification of those contracts in accordance with IFRIC 4, Determining whether an Arrangement contains a Lease when the application of their national accounting requirements produced the same result.

Short Sales -- SEC Moves to Curtail Abusive Short Sales
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The SEC announced several actions that are intended to protect against abusive short sales and make more short sale information available to the public.

First, the SEC made permanent an interim final temporary rule, Rule 204T, that seeks to reduce the potential for abusive "naked" short selling in the securities market. The new rule, Rule 204, Amendments to Regulation SHO, requires broker-dealers to promptly purchase or borrow securities to deliver on a short sale. The temporary rule, approved by the SEC in the fall of 2008, was set to expire on July 31, 2009.

Second, the SEC and its staff are working together with several self-regulatory organizations (SRO) to make short sale volume and transaction data available through the SRO websites. This effort will result in a substantial increase over the amount of information presently required by another temporary rule, known as Temporary 10a-3T. That rule, which will expire on August 1, 2009, applies only to certain institutional money managers and does not require public disclosure.

Third, the SEC intends to hold a public roundtable on Wednesday, September 30, 2009, to discuss securities lending, pre-borrowing, and possible additional short sale disclosures. The roundtable will consider, among other topics, the potential impact of a program requiring short sellers to pre-borrow their securities, possibly on a pilot basis, and adding a short sale indicator to the tapes to which transactions are reported for exchange-listed securities.

Updated EDGAR Filer Manual -- SEC Adopts Updated EDGAR Filer Manual
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The SEC has issued a final rule to adopt revisions to the Electronic Data Gathering, Analysis, and Retrieval System (EDGAR) Filer Manual to reflect updates in the EDGAR system. The revisions were made primarily to support the 2009 U.S. GAAP Taxonomy and the Schedule of Investments Taxonomy. The revisions to the EDGAR Filer Manual reflect changes in EDGAR Filer Manual Volume I: “General Information,” Version 7 (July 2009) and Volume II: “EDGAR Filing,” Version 12 (July 2009).

The final rule becomes effective upon publication in the Federal Register.

New Standard on Engagement Quality Review -- PCAOB Adopts Auditing Standard No. 7
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The PCAOB voted to adopt Auditing Standard (AS) No. 7, Engagement Quality Review (EQR). The Sarbanes-Oxley Act of 2002 directs the PCAOB to include in its auditing standards a requirement that each registered public accounting firm “provide a concurring or second partner review and approval of [each] audit report (and other related information), and concurring approval in its issuance, by a qualified person (as prescribed by the Board) associated with the public accounting firm, other than the person in charge of the audit, or by an independent reviewer (as prescribed by the Board).” The EQR standard provides a framework for the engagement quality reviewer to objectively evaluate the significant judgments made and related conclusions reached by the engagement team in forming an overall conclusion about the engagement.

AS No. 7 applies to all audit engagements and engagements to review interim financial information conducted pursuant to the standards of the PCAOB. The standard supersedes the PCAOB’s quality control standard, SECPS Requirements of Membership, Section 1000.08(f); 1000.39, Appendix E. The standard, if approved by the SEC, will become effective for both the EQR of audits and the EQR of interim reviews for fiscal years beginning on or after December 15, 2009.

Concept Release Requiring Engagement Partner to Sign Audit Report -- PCAOB Seeking Comments
For detail, please contact info@zy-cpa.com

The PCAOB is seeking comments on a Concept Release to consider the effects of a potential requirement for the engagement partner to sign the audit report. Any such requirement would be in addition to the existing requirement for the audit firm to sign its name on the audit report. The PCAOB is seeking comments on the Concept Release, which are due by Friday, September 11, 2009.

Some of the documents listed above may not be accessible under your current subscription. For information about upgrading your subscription to include additional content, click here:
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AUDITING AND INTERNAL CONTROLS HEADLINES:
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New Standard on Engagement Quality Review -- PCAOB Adopts Auditing Standard No. 7
For detail, please contact info@zy-cpa.com

As discussed above in our Accounting and SEC Summaries, the PCAOB voted to adopt Auditing Standard (AS) No. 7, Engagement Quality Review (EQR). The Sarbanes-Oxley Act of 2002 directs the PCAOB to include in its auditing standards a requirement that each registered public accounting firm “provide a concurring or second partner review and approval of [each] audit report (and other related information), and concurring approval in its issuance, by a qualified person (as prescribed by the Board) associated with the public accounting firm, other than the person in charge of the audit, or by an independent reviewer (as prescribed by the Board).” The EQR standard provides a framework for the engagement quality reviewer to objectively evaluate the significant judgments made and related conclusions reached by the engagement team in forming an overall conclusion about the engagement.

AS No. 7 applies to all audit engagements and engagements to review interim financial information conducted pursuant to the standards of the PCAOB. The standard supersedes the PCAOB’s quality control standard, SECPS Requirements of Membership, Section 1000.08(f); 1000.39, Appendix E. The standard, if approved by the SEC, will become effective for both the EQR of audits and the EQR of interim reviews for fiscal years beginning on or after December 15, 2009.

Concept Release Requiring Engagement Partner to Sign Audit Report -- PCAOB Seeking Comments
For detail, please contact info@zy-cpa.com

As discussed above in our Accounting and SEC Summaries, the PCAOB is seeking comments on a Concept Release to consider the effects of a potential requirement for the engagement partner to sign the audit report. Any such requirement would be in addition to the existing requirement for the audit firm to sign its name on the audit report. The PCAOB is seeking comments on the Concept Release, which are due by Friday, September 11, 2009.

Some of the documents listed above may not be accessible under your current subscription. For information about upgrading your subscription to include additional content, click here:
For detail, please contact info@zy-cpa.com