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The new AICPA Audit Risk Alert Financial Institutions Industry Developments—2009, Including Depository and Lending Institutions and Brokers and Dealers in Securities strategically combines the quality information and insight you were accustomed to in the Audit Risk Alert Securities Industry Developments with the content in the previously titled Audit Risk Alert Depository and Lending Institution Industry Developments. This new alert provides a comprehensive view of the financial institutions industry including the accounting and auditing issues important to auditors with clients in this industry. This alert also provides you with regulatory updates from the major regulatory agencies such as the SEC, FRB, FDIC, OCC, OTS, NCUA, FINRA, SIPC, NFA, and CFTC.
Auditing in this challenging economic environment requires continually evaluating the importance of long-standing auditing standards and regulatory guidance directed at areas such as auditing fair value measurements, other than temporary impairments, troubled debt restructurings, and accounting estimates such as the allowance for loan and lease losses—all of which are discussed from the perspective of the recent economic crisis in this alert. The current economic woes are stress testing the current guidance applicable to those areas and the critical thinking required to successfully apply this guidance during the engagement.
The targeted discussions of recent economic, industry, technical, regulatory, and professional developments that may affect your audits will invigorate the audit team's brainstorming sessions required under AU sections 314 and 316 within the GAAS standards. Auditors, financial statement preparers, and management will find these same discussions helpful in identifying the significant risks that may result in the material misstatement of financial statements.
New accounting and auditing guidance and exposure drafts that are particularly significant to this alert and covered in just the right amount of detail include:
This alert also includes information on emerging issues such as:
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How This Alert Helps You
.01 This Audit Risk Alert (alert) helps you plan and perform your audits of depository, lending, and other financial institutions, and also can be used by an entity's internal management to address areas of audit concern. This alert provides information to assist you in achieving a more robust understanding of the business, economic, and regulatory environments in which your clients operate. This alert is an important tool to help you identify the significant risks that may result in the material misstatement of financial statements and delivers information about emerging practice issues and current accounting, auditing, and regulatory developments. You should refer to the full text of accounting and auditing pronouncements as well as the full text of any rules or publications that are discussed in this alert.
.02 Certain accounting guidance referenced in this alert has been codified into the Financial Accounting Standards Board (FASB) Accounting Standards Codification™(ASC). On June 30, 2009, FASB issued FASB Statement No. 168, The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162, which is codified in FASB ASC 105, Generally Accepted Accounting Principles. On the effective date of this statement, FASB ASC became the source of authoritative U.S. accounting and reporting standards for nongovernmental entities, in addition to guidance issued by the Securities and Exchange Commission (SEC). FASB ASC superseded all then-existing, non-SEC accounting and reporting standards for nongovernmental entities. All other nongrandfathered, non-SEC accounting literature not included in FASB ASC became nonauthoritative. See the discussion of FASB ASC in the "Accounting Issues and Developments" section of this alert.
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