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Business and Policy Areas
Business and Policy Areas

AICPA Issues Practice Aid on Liquidity Restrictions

October 23, 2008

The AICPA has issued a Technical Practice Aid (TPA TIS Section 1100.15) that addresses liquidity restrictions that may be imposed on money market or other short-term investment funds. The TPA highlights potential accounting and auditing issues that might result from cash availability limitations. 

The AICPA is responding to accounting and auditing considerations created by recent market credit, valuation and liquidity conditions. The objective of the issuance is to compile relevant accounting and auditing considerations for use by practitioners and preparers; consequently, the TPA is considered non-authoritative. 

The TPA focuses on the following potential accounting and auditing areas that could be impacted by account withdrawal restrictions.

  • Balance sheet classification
  • Disclosures
  • Debt covenants
  • Subsequent events
  • Going concern
  • Auditor communication to governing boards
  • Auditor report --emphasis of a matter

NACUBO staff resource is Sue Menditto.  The accounting firm of Crowe Horwath, LLP has written a related paper for NACUBO.