Technical issues in perspective: an update on the work of the PCPS Technical Issues Committee.

• Position: TECHNICAL UPDATE - Securities Act of 1933 - American Institute of Certified Public Accountants. Private Companies Practice Section - Statistical data

The PCPS Technical Issues Committee monitors developments in standard-setting and speaks out on behalf of smaller firms and their clients to ensure that the private company perspective is heard. At its recent annual liaison meeting with the AICPA Auditing Standards Board, TIC asked for further guidance to address an audit firm's association with financial statements of a nonis-suer that are included in non-1933 Act filings.

TIC's request came in response to the proposed SAS, Filings with the U.S. Securities and Exchange Commission under the Securities Act of 1933, which was issued to clarify and update AU Section 711. The proposal focuses on an auditor's responsibilities in connection with financial statements of a nonissuer included in a registration statement filed under the Securities Act of 1933 (the 1933 Act), but provides little guidance for similar engagements related to non-1933 Act filings (such as government municipal bond prospectuses, franchise filings, private placement memorandums, certain debt agreements related to industrial revenue bonds or other tax incentives, and other circulars or equity offerings).

Among other points in its comment letter, TIC asked for clarification on engagement acceptance involving a non-1933 Act filing, the addition of certain required procedures and application guidance, and other changes that would improve auditor's awareness of applicable guidance outside of the non-1933 Act arena. TIC's suggestions were outside the scope of the existing standard, but they were added to the ASB's January 2011 agenda for consideration as a separate project.

In the liaison meeting, TIC reported on an unscientific, informal survey that TIC conducted that found that a significant majority of practitioners favored a separate ASB project to consider providing more performance guidance in this area and believed that doing so would further the public interest. The survey also indicated apparent diversity in practice on performance requirements and a possible lack of awareness of related existing guidance. TIC asked the ASB to reconsider ways to provide more guidance in the authoritative literature on non-1933 Act engagements.

In other comments to the ASB, TIC...