"The AICPA and the CPA profession are committed to constantly evaluate and improve our financial reporting and auditing systems," said the AICPA statement. "We commend the CEOs of the profession's largest firms for demonstrating their leadership in confronting the issues affecting the profession through their statement [last week]. The largest firms are an important part of the profession and are working through the AICPA to address some of today's issues."

The statement indicated that with the participation of the firms, the AICPA will prepare in time for the year-end reporting period an auditor "tool kit" for related party transactions and specific recommendations to the SEC that it can provide to preparers concerning disclosure guidance on special purpose entities, and issues related to market risks, including those relating to energy contracts.  

In addition, the AICPA said it will: Issue in the first quarter of 2002 an exposure draft covering a new audit standard for detecting fraud including more precise guidance on auditing for material misstatements due to fraud; Issue guidance for company managements and audit committees on the new measures for deterring fraud, such as internal control procedures; issue in the first quarter of 2002 revised auditor standards on review of quarterly financial statements; Issue in the second quarter of 2002 an exposure draft on improved audit standards to better guide auditors through the audit process including their assessment of the risks of material misstatements whether caused by fraud or error and improved guidance as to the type of procedures that should be performed to respond to these risks.

"By improving financial reporting, we can better help investors make informed decisions and, in the process, increase confidence in our country's financial reporting system. The Institute will collaborate with the firms and the SEC to develop an array of specific recommendations to modernize and improve the current financial reporting regime that better respond to the requirements of the global business environment," said the statement.