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Accounting Research
Manager(TM)
Weekly Summary of
Developments
October 25-29, 2010
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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:
For detail, please contact info@zy-cpa.com
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
Contingency Disclosure -- FASB Decides to Defer Guidance and
Considers Other Matters
Financial Reform -- Publication Examines Financial Reform
Legislation
SEC Matters -- SEC Director Speaks About Corp Fin
Agenda
SEC Regulations Committee -- CAQ SEC Regulations Committee Minutes
Issued
IFRS for SMEs
-- Training Manual for the IFRS for SMEs Published
Risk Alerts -- AICPA Issues Audit Risk Alerts
Auditing and Internal
Controls Headlines
Quality Control -- AICPA Issues Quality Control Standard
Risk Assessment -- Discussion and Analysis of PCAOB New
Auditing Standards on Risk Assessment
Risk Alerts -- AICPA Issues Audit Risk Alerts
Government Headlines
Federal Grants -- Federal Financial Accountability and
Transparency Act Discussed
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ACCOUNTING AND SEC HEADLINES:
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Contingency Disclosure --
FASB Decides to Defer Guidance and Considers Other Matters
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As reported in its
"Summary of Board Decisions" publication, the FASB met on October 27,
2010, and discussed the following topics: (a) disclosure of certain loss
contingencies; and (b) accounting for financial instruments. The FASB
decided to defer guidance on disclosure of certain loss contingencies contained
in its July 2010 Exposure Draft (ED), Contingencies (Topic 450): Disclosure
of Certain Loss Contingencies. This ED had proposed that public entities
would begin providing enhanced disclosures in financial statements for fiscal
years ending after December 15, 2010. The FASB decided that a final standard
will not be effective for the 2010 calendar year-end reporting period and will
decide on an effective date at a future meeting, after it has substantially
concluded its redeliberations.
The FASB also discussed
accounting for financial instruments. The FASB staff summarized significant
feedback received on the proposal for classification and measurement of
financial instruments included in its May 2010 ED, Accounting for Financial
Instruments and Revisions to the Accounting for Derivative Instruments and
Hedging Activities-Financial Instruments (Topic 825) and Derivatives and
Hedging (Topic 815). The FASB had received a summary of significant
feedback on its proposed credit impairment and interest income recognition
models at the October 21, 2010 joint meeting with the IASB. The FASB is
expected to redeliberate the proposed credit
impairment and interest income recognition models jointly with the IASB,
beginning with the November 10-12, 2010 joint meetings and begin redeliberations of its proposed classification and
measurement approach in December 2010.
Financial Reform --
Publication Examines Financial Reform Legislation
For detail, please contact info@zy-cpa.com
We have published “A Closer
Look: Financial Reform Legislation Enacted in
-SEC rulemaking under the
Dodd-Frank Act;
-Permanent exemption for
certain small companies from Section 404(b) of the Sarbanes-Oxley Act of 2002;
-Executive compensation and
corporate governance;
-Expanded SEC powers and
changes to its organization; and
-Public Company Accounting
Oversight Board authority over broker-dealers.
See our Literature Update for
complete details.
SEC Matters -- SEC
Director Speaks About Corp Fin Agenda
For detail, please contact info@zy-cpa.com
On October 22, 2010, Meredith
B. Cross, Director of the Division of Corporation Finance (Corp Fin) of the
SEC, provided insights into Corp Fin’s current agenda, focusing in particular
on projects that have governance implications. Topics discussed by Ms. Cross
were:
-Corporate governance
regulation and state law;
-Rulemaking under the
Dodd-Frank Act, including: (a) rules on shareholder “say-on-pay”; (b)
uninstructed broker votes; (c) compensation committee listing standards;
(d) calculation and disclosure of median total compensation; and (e)
disclosure of the relationship between senior executive pay and company
financial performance; and
-Examination and potential
changes to the current proxy voting system.
SEC Regulations Committee
-- CAQ SEC Regulations Committee Minutes Issued
For detail, please contact info@zy-cpa.com
The Center for Audit Quality
SEC Regulations Committee has issued minutes from its joint meeting with the
staff of the SEC held on September 21, 2010. This committee meets periodically
with the SEC staff to discuss emerging technical accounting and reporting
issues relating to SEC rules and regulations. Topics discussed at this meeting
included the following:
-Update on Corp Fin personnel
and organizational changes, including the creation of three specialized
offices;
-Various financial reporting
matters including: (a) certain implications of the Dodd-Frank Act; (b)
loss contingency disclosures; (c) non-GAAP financial measures; (d)
pro forma financial information for an acquired foreign business; and (e)
disclosures about potential material exposures to further devaluations of the
Venezuelan currency;
-Efforts of the Corp Fin
staff related to the “IFRS Work Plan” issued in February 2010 as part of the Commission
Statement in Support of Convergence and Global Accounting Standards;
-Implementation issues and
observations associated with the SEC’s requirements on the use of XBRL;
-Financial statements of
“lower tier” (i.e., acquirees and equity investees) companies; and
-Applicability of the
disclosure requirements of Item 3(f) of Form S-4 when the target is a reporting
company that is significant at or below the 20% level.
IFRS for SMEs -- Training Manual for the IFRS for SMEs Published
For detail, please contact info@zy-cpa.com
We have published IASC
Foundation: Training Manual for the IFRS for SMEs.
This publication is being released by the International Accounting Standards
Committee (IASC) Foundation to assist entities in understanding and
implementing International Financial Reporting Standard (IFRS) for Small and
Medium-sized Entities (SMEs). This training
manual is scheduled to have 35 modules corresponding to the 35 sections in IFRS
for SMEs. The IASC Foundation is releasing the
modules as they are finalized, and thus far has published the 22 training
modules included in this publication. The modules provide explanations,
examples, test questions (with answers), and case studies on the guidance
presented in the related sections of IFRS for SMEs
and also include a comparison with full IFRS.
See our Literature Update for
complete details.
Risk Alerts -- AICPA
Issues Audit Risk Alerts
The AICPA has issued the
following Audit Risk Alerts:
-Audit Risk Alert,
For detail, please contact info@zy-cpa.com
-Audit Risk Alert, Compilation
and Review Developments - 2010/2011.
For detail, please contact info@zy-cpa.com
AICPA Audit Risk Alerts
provide users with a detailed overview of recent industry, technical,
regulatory, or professional developments. Topics covered in each Alert include:
(a)regulatory activities (SEC, PCAOB, and other government agencies); (b)economic
and industry developments or trends; (c)recent auditing and attestation
pronouncements and related guidance; (d)recent AICPA independence and
ethics pronouncements; and (e)future or emerging issues to monitor.
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
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AUDITING AND INTERNAL CONTROLS
HEADLINES:
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Quality Control -- AICPA
Issues Quality Control Standard
For detail, please contact info@zy-cpa.com
The AICPA has issued
Statement on Quality Control Standards (SQCS) No. 8, A Firm’s System of
Quality Control (Redrafted). This SQCS supersedes SQCS No. 7, A Firm’s
System of Quality Control. This statement addresses a CPA firm’s responsibilities
for its system of quality control for its accounting and auditing practice.
This statement is to be read in conjunction with the AICPA Code of Professional
Conduct and other relevant ethical requirements.
This SQCS is applicable to a
CPA firm’s system of quality control for its accounting and auditing practice
as of January 1, 2012.
Risk Assessment --
Discussion and Analysis of PCAOB New Auditing Standards on Risk Assessment
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that provides discussion and analysis of the PCAOB's
new auditing standards (AS) related to the auditor’s assessment of, and
response to, the risks of material misstatement in the financial statements.
The eight risk assessment standards (AS No. 8 through AS No. 15) address audit
procedures performed throughout the audit, from the initial planning stages
through the evaluation of the audit results. Among other matters, these
standards are intended to:
-Enhance the integration of
the audit of the financial statements with the audit of internal control over
financial reporting;
-Integrate the auditor’s
current responsibilities for considering fraud during the audit; and
-Reduce unnecessary
differences with the standards of the International Auditing and Assurance
Standards Board while making changes that are necessary in the PCAOB’s view for audits of issuers.
The standards, if approved by
the SEC, will become effective for audits of fiscal periods beginning on or
after December 15, 2010.
Risk Alerts -- AICPA
Issues Audit Risk Alerts
As discussed above in our
Accounting and SEC Summaries, the AICPA has issued the following Audit Risk
Alerts:
-Audit Risk Alert, Independence
and Ethics Developments - 2010/2011; and
For detail, please contact info@zy-cpa.com
-Audit Risk Alert, Compilation
and Review Developments - 2010/2011.
For detail, please contact info@zy-cpa.com
AICPA Audit Risk Alerts
provide users with a detailed overview of recent industry, technical,
regulatory, or professional developments. Topics covered in each Alert include:
(a)regulatory activities (SEC, PCAOB, and other government agencies); (b)economic
and industry developments or trends; (c)recent auditing and attestation
pronouncements and related guidance; (d)recent AICPA independence and
ethics pronouncements; and (e)future or emerging issues to monitor.
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
======================
GOVERNMENT HEADLINES:
======================
Federal Grants -- Federal
Financial Accountability and Transparency Act Discussed
For detail, please contact info@zy-cpa.com
We have published a
Governmental GAAP Update Service that discusses the "Federal Financial
Accountability and Transparency Act" (FFATA). FFATA’s
goal is to create an atmosphere of “open government” by reporting every federal
grant online in an easily accessible format. FFATA becomes effective beginning
for all new grants on or after October 1, 2010, with the first reporting period
as of October 31, 2010, due November 30, 2010. All entities that receive
federal funds either directly or indirectly that are not individuals (e.g.,
Medicaid recipients) must report federal activity online. Topics discussed in
this update are:
-Major provisions of FFATA;
-Searchable websites for
governmental spending information;
-Executive compensation
reporting;
-Grant/contract award
threshold;
-Auditing considerations; and
-Timeline for reporting under
FFATA.
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