AICPA supports SEC's proposed rule on retention of audit, review records.

• Position: Regulatory matters - American Institute of Certified Public Accountants, Securities and Exchange Commission - Brief Article

Last month's CPA 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, the 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 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 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...