Accounting Standards And Its Effect On The Development Of Accounting Theory

An entity recognizes revenue when goods or services that are transferred to customers for the amount the entity is expected to be entitled to receive in exchange for goods or services and there are five steps used to apply the principle. (FASB ASC 606-1-SUMMARY-2).

In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

Even if uniformity were to be reached, the IOSCO disclosure standards do not encircle all of the information required of an easy access to cross-border capital markets.

In 1973, the Financial Accounting Standards Board (FASB) was created and their mission is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.” (FASB.org, 2009a). The FASB is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. Therefore, the FASB plays a vital and important role in protecting the financial well being and the overall stability of our

The Financial Accounting Standards Board (FASB) sets the Generally Accepted Accounting Principles in the United States. The FASB Accounting Standards codification implements a system for organizing non-governmental generally accepted

The field of accounting is constantly evolving. This is true not only for the theory of accounting itself but also the entities that govern its theory and practice. Presently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are faced with some of the biggest challenges to date. To understand the significance of these two boards, it is necessary to understand their histories, relations between the boards, and the standards that they set. Also how the knowledge of these boards and the field they lead, gained through the masters of science in accountancy

I. As discussed many times in ACC 310, the FASB is the current accounting standard setters in the U.S. as they are empowered by the SEC. Visit the FASB website at www.fasb.org and answer the following questions: (Do not cut and paste but answer in your own words. Any material quoted should be cited).

Background. Revenue is a financial statement item. Accounting for revenue contains standards and principles for revenue recognition. Revenue recognition rules and statutory requirements significantly evolved over the years. It became more detailed for the purpose so financial statement users can understand true company performance and projections.

Fast forward to 1970, where the APB’s main contribution “Basic Concepts and Accounting Principles Underlying Financial Statement of Business Enterprises was highly critized for achieving too little too late. Ultimately, resulting in the AICPA suggesting that the standard setting role be turned over to an autonomous body known as the Financial Accounting Standards Board

The FASB Codification database is easy to use when researching the accounting standards once the basics are fully understood. The FASB Codification database can be accessed by logging in at http://aaahq.org/ascLogin.cfm and using the following codes (case sensitive):

Revenue is the largest item in financial statements, and issues involving revenue recognition are among the most important and difficult that standard setters and accountants face. Revenue

There were 347 alleged cases of fraud involving public company according to Fraudulent Financial Reporting: 1998-2007 sponsored by Committee of Sponsoring Organizations of the Treadway Commission (COSO, 2010) that were investigated by Securities and Exchange Commission (SEC) on May 2010, which is showing 53 increased in the number of fraud when compared to the 1987-1997 study (p.5). COSO’s result is a sad number in a 10 year period, which averaging close to 35 accounting frauds a year (p.5). COSO’S study shows out of the nearly 350 financial frauds investigated 60% were identified to involved improper revenue recognition and 89% were recognized the CEOs and/or CFOs involvement (p.5). COSO’s research

D Solomons, The Political Implications of Accounting and Accounting Standard Setting, Accounting and Business Research, 1983

First, The International Accounting Standards Board (IASB) issues The International Financial Reporting Standards (IFRS) on U.S securities and exchange companies listed.

A Case Study Analysis on the Applications of Accounting Standards and the Conceptual Framework by a Reporting Entity