Aicpa Essay

The information in this report regarding the accounting standards for private companies is as stated in the proposal stage. The three options discussed are options being considered and the Accounting Standards Board (AcSB) has issued an

1. Chic Paints is a large Limited company. Chic Paints is a limited company formerly part of Ashtead PLC. Ashtead PLC had been a long standing manufacturer of everything from bricks to butter.

To address the increasing challenges of legislating those governs our society today, “countries all over the world have begun to outsource rulemaking to bodies consisting of people familiar with the subject. For that reason, policymakers rely on private entities to establish financial accounting and reporting standards” (Donald Kieso, 2003, Intermediate Accounting). The two most influential standard-setters are the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).

Certified Public Accountants (CPA) all over the world follow company policies and regulations. The Generally Accepted Accounting Principles (GAAP) is a standard accounting system used by accounts in the United States of America. CPAs who work for international companies use the International Financial Reporting Standards (IFRS).

In 1962, many at the Eighth International Congress of Accountants voiced the need to be able to compare financial statements from different parts of the world with a common set of standards. The American Institute of Certified Public Accountants (AICPA) published a book on the various accounting standards and practices in various countries. The AICPA also thought steps should be taken towards the idea of a single body of accounting principles by reactivating a committee on international relations (AICPA 1964). The AIPCA sought to foster the development of auditing, accounting, and reporting standards on an international basis. Wilkinson (1965) was one of the early authors to define accounting uniformity as “each company presents only one set of accounts for all investors, of whatever nationality.” This idea, along with many others would eventually culminate in the establishment of the International Accounting Standards Committee (IASC) some years later.

This report analyses and sets out the role of the Australian Accounting Standards Board and also considers the main aims and purpose of AASB and hence drawing a conclusion as to whether AASB is a significant player or a toothless tiger.

Private and public accounting have long been discussed and disputed in regards to financial reporting. Since the Financial Accounting Standards Board (FASB) was created in 1973, accountants have called for different accounting regulations for private and public accounting sectors, as private companies do not have the resources to meet the complex requirements of public companies. Private companies currently are not required by law to issue annual or quarterly financial statements. Private companies do, however, have the option to apply the U.S. Generally Accepted Accounting Principles (GAAP), cash basis, or accrual accounting to their financial statements (James, 2012).

About a year ago FIFA became the most beautiful and most sought after soccer game on the world. This year the game returns with impressive new graphics and tremendous sound. The new features added to EA FIFA 2012 will have you amazing in delight at the enhancements made.

In 2001, IASC was replaced by IASB as the board for setting these standards. This board consist of 14 experts having recent practical experience in setting accounting standards. They bought in the strategic working party, which took a new look at IASC’s structure. IASB bought in many structural changes. But one of the most notable change among that was replacing the part-time volunteer board with full-time member. The four main objective of IASB are

IASB was founded in April 2001, as a replacement for the IASC. It consists of 15 board members from different countries, with a diverse financial reporting background appointed by a board of Trustees (Members of the IASB, 2007). It is the main standard-setter for the countries that use IASs for their financial reporting. USA on the other hand has its own set of standards (GAAP) issued by the Financial Accounting Standards Board. But IASB and FASB since 2002 have been working together focusing on making a converged set of high quality global standards. This will have a huge impact on a number of elements, such as investors, stock markets, accountants,

Two years later, the AICPA joined with its Canadian and United Kingdom counterparts to investigate and compare the diverse accounting standards. They continued to meet into the mid-1970s, and published results of their findings and opinions on best practices. Then in 1973, the AICPA and its equivalents in 8 countries formed the International Accounting Standards Committee (IASC), in order “to formulate and publish, in the public interest, basic standards to be observed in the presentation of audited accounts and financial statements and to promote their worldwide acceptance” (FASB).

The I.A.S. Board’s objectives are to develop a single set of high quality standards, understandable and enforceable to everyone. Set a global accounting standard that requires transparent and comparable information in general purpose, financial statements while cooperating with the national accounting standard-setters to achieve convergence in accounting standards around the world.

Accounting standards has been around for thousands and thousands of years. Statements and loss and statements of balance emerged in about 1600. The reason behind the financial statements was to obtain information regarding capital. In the nineteenth century, it became necessary to develop accounting records and reports that reflected capital employed in various ways. When the industrial revolution emerged in the United States it brought a need for more standard accounting principles. In 1934, Securities and Exchange Commission was created to prescribe accounting principles and reporting practices. In 1936 AICPA American Institute of Certified Public Accountants was created to have a large influence on the development of accounting theory. In 1973 FASB Financial Accounting Standard Board was created to show how accounting principal should be established and issued accounting standards. FASB mission is to establish and improve accounting and reporting standards for the guidance and education of the public.

The International Accounting Standards Board (IASB) is revising its Conceptual Framework to improve and clarify the ways financial statements are prepared and presented. The process began in 2004 with a preliminary discussions between the US Financial Accounting Standards Board (FASB) and the IASB. Work was suspended in 2010 then revived in late 2012 as an IASB-only project. Work is still ongoing, with a preliminary discussion paper released in 2013 aiming to collect comments to develop an Exposure Draft will be published in early 2015.

Following this event the Securities and Exchange commission was created to administer various securities acts and to prescribe accounting principles and reporting practices (Schroeder, et. al, 2014, p. 6). Subsequently, the American Institute of Certified Public Accountants (AICPA) was given the opportunity to create accounting standards for companies to follow. But dissidence cropped up as disagreements arose with how members would be selected and the timeframe it took to bring the potential regulations to the public.