Staff Audit Practice Alert No. 4, issued last week by the Public Company Accounting Oversight Board (PCAOB), is intended to remind auditors of their responsibilities in conducting reviews of interim financial information and annual audits in light of the new, FASB Staff Positions (FSPs) related to fair value measurements and other-than-temporary impairments. The alert addresses three recently issued Financial Accounting Standards Board Staff Positions:
- 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;
- FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments; and
- FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments.
Martin Baumann, PCAOB chief auditor and director of professional standards, explains, “the alert will be helpful to auditors as they conclude their work related to the first quarter of 2009 or prepare for the review of the second quarter and the audit of the financial statements, including the integrated audit.”
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