Professional issues task force issues Practice Alert 2005-1.The Professional Issues Task Force has issued Practice Alert 2005-1, Auditing Procedures With Respect to Variable Interest Entities. The Practice Alert provides guidance to auditors of nonissuers and their firms in planning and performing auditing procedures with respect to variable interest entities. The Practice Alert provides guidance regarding the following: * Identification of the population of variable interests in VIEs. * Consideration of the involvement of related parties. * Identification of those VIEs in which the auditee is the primary beneficiary. * For those VIEs for which the auditee is the primary beneficiary, consideration as to whether the auditee properly accounted for the VIE in the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . * For those VIEs for which the auditee is not the primary beneficiary, consideration as to whether the auditee properly accounted for its interests in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . * Consideration as to whether additional evidential ev·i·den·tial adj. Law Of, providing, or constituting evidence: evidential material. ev matter is needed. * Consideration as to whether the auditee has made the appropriate disclosures about the VIEs with which it is involved, both those for which it is the primary beneficiary and those for which it is not the primary beneficiary. * Obtaining appropriate representations from management. * Consideration as to whether the results of the auditor's procedures with respect to VIEs require any special reporting considerations. The Professional Issues Task Force encourages practitioners and AICPA AICPA See American Institute of Certified Public Accountants (AICPA). member firms to incorporate the guidance contained in the alert as soon as practicable practicable adj. when something can be done or performed. . The alert is available on the AICPA's Web site: [email] www.aicpa.org/download/auditstd/pract_alert/pa_2005_1.pdf |
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