Financial Institutions Industry Developments Audit Risk Alert--2009, Including Depository and Lending Institutions and Brokers and Dealers in Securities

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:

• FASB Statement No. 168, The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162 (FASB ASC 105).
• FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FASB ASC 820)
• FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FASB ASC 320 and 325)
• FASB Statement No. 167, Amendments to FASB Interpretation No. 46(R)
• FASB Statement No. 166, Accounting for Transfers of Financial Assets
• Exposure Draft Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses

This alert also includes information on emerging issues such as:

• The FASB Accounting Standards Codification™
• Convergence with International Financial Reporting Standards
• The ASB's Clarity Project including convergence with international auditing standards