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Ready to fast track your knowledge of the auditing and accounting issues significant to the construction industry? Whether you're preparing your company's financial statements or preparing for an auditing engagement in the construction industry, this Audit and Accounting Guide provides you with the latest information on accounting and auditing issues affecting the construction industry and related financial statement considerations.
Have you used the FASB Accounting Standards Codification™ (ASC) to maneuver through the new structure of GAAP? You'll find the helpful guidance you're accustomed to now fully conformed to the ASC, along with a clear explanation of the ASC's significance to the profession, numerical referencing system, and Internet-based research system.
Updated with conforming changes as of May 1, 2009, the guide includes relevant guidance contained in official pronouncements issued through that date, supplemented with specific "how-to" recommendations. In particular, the following new pronouncements have been reflected in this edition:
You'll also want to check out the new developments related to the heavily debated fair value issue addressed in FASB Statement No. 157, Fair Value Measurements. With all these must-have features, this guide is an essential reference for firms, small practitioners, and professionals in business and industry.
For a topical listing of subject matter by chapter, click on the Table of Contents tab.
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Preface
Purpose and Applicability
This guide applies to financial reporting and auditing in the construction industry, although the guidance provided may be useful in other industries for companies whose business involves construction-type contracts. It has been prepared to
| • | provide background information on the nature and characteristics of the construction industry. |
| • | update the AICPAindustry Audit and Accounting Guide Construction Contractors, which was originally published in 1965, to cover all pertinent pronouncements to date. |
| • | assist contractors in applying generally accepted accounting principles (GAAP). |
| • | assist the independent auditor in applying generally accepted auditing standards (GAAS) and his or her knowledge of GAAP to his or her determination of whether GAAP has been applied by management, which has the primary responsibility for financial statements. |
Applicability of Requirements of the Sarbanes-Oxley Act of 2002
Publicly held companies and other issuers (see the following definition) are subject to the provisions of the Sarbanes-Oxley Act of 2002 (the act) and related Securities and Exchange Commission (SEC) regulations implementing the act. Their outside auditors are also subject to the provisions of the act and to the rules and standards issued by the Public Company Accounting Oversight Board (PCAOB).
The following sections summarize certain key areas addressed by the act, the SEC, and the PCAOB that are particularly relevant to the preparation and issuance of an issuer's financial statements and the preparation and issuance of an audit report on those financial statements. However, the provisions of the act, the regulations of the SEC, and the rules and standards of the PCAOB are numerous and are not all addressed in this section or in this guide.
Definition of an Issuer
The act states that the term issuer means an issuer (as defined in Section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c)), the securities of which are registered under Section 12 of that act (15 U.S.C. 78l), or that is required to file reports under Section 15(d) (15 U.S.C. 78o(d)), or that files or has filed a registration statement that has not yet become effective under the Securities Act of 1933 (15 U.S.C. 77a et seq.), and that it has not withdrawn.
Issuers, as defined by the act, and other entities when prescribed by the rules of the SEC (collectively referred to in this guide as issuers or issuer) and their public accounting firms (who must be registered with the PCAOB) are subject to the provisions of the act, implementing SEC regulations, and the rules and standards of the PCAOB, as appropriate.
Nonissuers are those entities not subject to the act or the rules of the SEC.
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