AICPA supports SEC's proposed rule on retention of audit, review records. (regulatory matters).Last month's CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. Letter provided information on numerous proposals released by the Securities and Exchange Commission and the AICPA's comment letters in response. Consistent with this effort to help accomplish the timely and effective implementation of the Sarbanes-Oxley Act See SOX. , the AICPA AICPA See American Institute of Certified Public Accountants (AICPA). commented on--and showed support for--an SEC proposal on retention of records related to audits and reviews of issuers' financial statements. Saying that it supported the proposed rule but that the rule "could be clarified and improved in several respects," the Institute focused its comments on clarifying various definitions in the proposal to make it more workable and effective and, in particular, to ensure that the rule does not inhibit inhibit /in·hib·it/ (in-hib´it) to retard, arrest, or restrain. in·hib·it v. 1. To hold back; restrain. 2. the free flow of information and communication between the auditor and the issuer and amongst members of the audit team. The Institute also said a tendency to communicate less in writing, which could be an unintended consequence For the 1996 novel by John Ross, see . Unintended consequences are situations where an action results in an outcome that is not (or not only) what is intended. The unintended results may be foreseen or unforeseen, but they should be the logical or likely results of the of the proposed rule as written, may result in less complete communications and greater potential for misunderstanding of facts. Furthermore, it may negatively impact the effectiveness and efficiency of reviews by supervisory personnel, concurring con·cur intr.v. con·curred, con·cur·ring, con·curs 1. To be of the same opinion; agree: concurred on the issue of preventing crime. See Synonyms at assent. 2. partner reviewers and firm experts. Finally, the AICPA recommended that the SEC modify the provision of the proposed rule that is designed to ensure the preservation of documents that reflect differing professional judgments and views on significant matters, both within the accounting firm and between the firm and the issuer, and how those differences were resolved. The proposed rule would require that records be retained whether the conclusions, opinions, analyses or financial data in the records would support or "cast doubt" on the final conclusions reached by the auditor. While it agrees with this principle, the AICPA believes that the term "cast doubt" may be too broad, and since it is not used in professional standards, may be misunderstood mis·un·der·stood v. Past tense and past participle of misunderstand. adj. 1. Incorrectly understood or interpreted. 2. by auditors. For the full text of this comment letter and other information on implementation of the Sarbanes-Oxley Act, visit: website: www.aicpa.org/sarbanes/index.asp |
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