The five largest accounting firms and the American Institute of Certified Public Accountants today released a detailed list of “risk factors” that should be considered as companies prepare their 2001 financial statements.

The current economic downturn, events of September 11, and recent business failures have combined to create a troubled financial reporting environment that poses significant challenges for business and management, boards of directors, audit committees, and auditors.

The five firms and the AICPA have identified the specific financial reporting issues that are especially relevant in these times, and recommend actions that can be taken to address such financial reporting risks.

Key financial reporting issues include: liquidity and viability, changes in internal control, unusual transactions, related parties, off-balance sheet arrangements, materiality, adequacy of disclosure, and it has outlined additional financial statement areas that merit consideration in the current environment.

The accounting profession has outlined thirty actions to be taken by management, auditors, and audit committees to achieve high quality financial reporting in the 2001 reporting year.

Company management, audit committees and auditors have separate roles and responsibilities, but share a common goal of high quality financial reporting of the highest quality. “To achieve this goal, they must commit fully to execute their own responsibilities and work together by sharing information through ongoing communication,” they say.