Professional issues task force issues Practice Alert 2005-1.

• Position: Variable Interest Entities - Brief article

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.

* 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 with generally accepted accounting principles.

* Consideration as to whether additional evidential matter is needed.

* Consideration as to...