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• CAQ Alert #2007-2 February 14, 2007
  • SEC Regulations Committee issues revised discussion document on FIN 48, Accounting for Uncertainty in Income taxes: Provides guidance on which disclosures should be made under FASB Interpretation No. 48 in Form 10-Q in the period of adoption, as well as guidance for disclosures if a company changes classification as it relates to Interest and Penalties.
   
• CAQ Alert #2007-3 February 15th, 2007
  • Center for Audit Quality Issues FAQs on Quantifying Financial Statement Misstatements: Center for Audit Quality member firms continue to have questions related to the quantification of financial statement misstatements and expressed the need for additional clarification for implementing certain aspects of SAB 108. As a result, the Center has developed the following frequently asked questions (FAQs) which are based on discussions with the SEC staff.

Financial Accounting Standards Board: www.fasb.org

• FAS 159
  • FASB standard establishes fair value option for financial assets and liabilities. The fair value option established by this Statement permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. A not-for-profit organization shall report unrealized gains and losses in its statement of activities or similar statement.
  
   
• FSP FIN 48-a
  • This new guidance replaces existing language with a more suitable verbiage for constituents. The term "ultimate settlement," will be replaced with "effectively settled." Therefore, when a tax position is effectively settled any previously unrecognized tax benefits for the position would be recognized or adjusted based on the terms of the settlement.
  
  
• FAS 158-1
  • Statement 158 amended the recognition provisions of Statements 87, 88, and 106 to require recognition of the funded status of defined benefit postretirement plans in an employer's statement of financial position.

Public Company Oversight Board:

• PCAOB Standards Relating to Auditors' Responsibilities With
  Respect to Fraud-
  
  • In light of PBAOB's quality control concerns about auditing for fraud risk among auditing firms, it has issued report PCAOB 2007-001. This report reinforces the need for auditors to be more careful at risks of fraud. Furthermore, audit firms need to be more robust in their efforts to uncover fraud. This release focuses on the following topics:
    • Auditor's overall approach to the detection of financial fraud
    • Brainstorming sessions and fraud related inquires
    • Auditors response to fraud risk factors
    • Financial statement misstatement
    • Risk of Management override of controls (i.e., in journal entries and accounting estimates)
    • Other areas to improve fraud detection (i.e., analytical procedures, confirmation process, roll forward of interim substantive testing, and review of interim financial information)
  
  Securities and Exchange Commission (SEC):
     
• SAB 108: Quantifying misstatements using a dual method approach to account for the cumulative effect in current years, as well as all subsequent years of misstatements.
  
  International Accounting Standard Board:
  
  
• IASB Update and IFRIC Update -
  
  • IASB Update
  • IFIC Update
    

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