AICPA Audit position statement.

The AICPA's Accounting Standards Executive Committee has issued Statement of Position 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies, effective for fiscal years beginning on or after Dec.15, 2007, with earlier application encouraged.

The SOP provides guidance for determining whether an entity is within the scope of the AICPA Audit and Accounting Guide--Investment Companies.

For those entities that are investment companies under the SOP, it also addresses whether the specialized industry accounting principles of the Guide should be retained by a parent company in consolidation or by an investor that has the ability to exercise significant influence over the investment company and applies the equity method of accounting to its investment in the entity (referred to as an equity method investor).

Copies of the SOP are available at www.cpa2biz.com/store or call [phone].