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Accounting Research Manager®
Weekly Summary of Developments
August 15-19, 2011
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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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Accounting and SEC Headlines

Auditor Independence -- PCAOB Issues Concept Release on Auditor Independence and Audit Firm Rotation
Financial Assets and Liabilities -- Interpretation Updated

Auditing and Internal Controls Summaries

Auditor Independence -- PCAOB Issues Concept Release on Auditor Independence and Audit Firm Rotation


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ACCOUNTING AND SEC HEADLINES:
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Auditor Independence -- PCAOB Issues Concept Release on Auditor Independence and Audit Firm Rotation
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The PCAOB has issued for public comment, Concept Release on Auditor Independence and Audit Firm Rotation; Notice of Roundtable. This concept release seeks public comment on ways that auditor independence, objectivity, and professional skepticism can be enhanced, including through mandatory rotation of audit firms. Mandatory audit firm rotation would limit the number of consecutive years for which a registered public accounting firm could serve as the auditor of a public company.

The concept release notes that proponents of audit firm rotation believe that setting a term limit on the audit relationship could free the auditor, to a significant degree, from the effects of client pressure. Auditor rotation may also offer an opportunity for a fresh look at the company’s financial reporting. However, opponents of audit firm rotation have expressed concerns about the costs of changing auditors. In addition, opponents expressed the belief that audit quality may suffer in the early years of engagements involving new auditors.

The concept release invites comments on specific questions, such as whether the PCAOB should consider a rotation requirement only for audit tenures of more than 10 years or only for the largest issuer audits. Suggestions on alternative measures that could meaningfully enhance auditor independence, objectivity, and professional skepticism are also requested.

Comments on the concept release are due December 14, 2011.

The PCAOB intends to convene a public roundtable on auditor independence and mandatory audit firm rotation in March 2012. Additional details about the roundtable are expected to be announced at a later date.

Financial Assets and Liabilities -- Interpretation Updated
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We have revised our publication, Financial Assets and Liabilities - Sales, Transfers, and Extinguishments: Interpretations of U.S. GAAP. This publication provides guidance on the accounting for sales, transfers, and servicing of financial assets, and the extinguishment of liabilities. This edition has been updated to reflect amendments to the FASB Accounting Standards CodificationTM through FASB Accounting Standards Update No. 2011-06, Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers, and FASB Editorial and Maintenance Update No. 2011-11.

See our Literature Update for complete details.

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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Auditor Independence -- PCAOB Issues Concept Release on Auditor Independence and Audit Firm Rotation
For detail, please contact info@hkcmcpa.us


As discussed above in our Accounting and SEC Summaries, the PCAOB has issued for public comment, Concept Release on Auditor Independence and Audit Firm Rotation; Notice of Roundtable. This concept release seeks public comment on ways that auditor independence, objectivity, and professional skepticism can be enhanced, including through mandatory rotation of audit firms. Mandatory audit firm rotation would limit the number of consecutive years for which a registered public accounting firm could serve as the auditor of a public company.

The concept release notes that proponents of audit firm rotation believe that setting a term limit on the audit relationship could free the auditor, to a significant degree, from the effects of client pressure. Auditor rotation may also offer an opportunity for a fresh look at the company’s financial reporting. However, opponents of audit firm rotation have expressed concerns about the costs of changing auditors. In addition, opponents expressed the belief that audit quality may suffer in the early years of engagements involving new auditors.

The concept release invites comments on specific questions, such as whether the PCAOB should consider a rotation requirement only for audit tenures of more than 10 years or only for the largest issuer audits. Suggestions on alternative measures that could meaningfully enhance auditor independence, objectivity, and professional skepticism are also requested.

Comments on the concept release are due December 14, 2011.

The PCAOB intends to convene a public roundtable on auditor independence and mandatory audit firm rotation in March 2012. Additional details about the roundtable are expected to be announced at a later date.

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@hkcmcpa.us