The American Institute Of Accountants

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In 1939, the AIA also known as The American Institute of Accountants formed the Committee on Accounting Procedure that issued 51 accounting research bulletins and began the process that eventually became known as the GAAP. In 1957, the American Institute of Accountants was renamed AICPA or American Institute of Certified Public Accountants. The AICPA or American Institute of Certified Public Accountants formed the Accounting Principles Board in 1959, which issued their 31 APB Opinions. The FASB or Financial Accounting Standards Board formed in 1973 issued 168 Statements of financial accounting standards. As of July 1, 2009, the Accounting Standards Codification became one authoritative source of general accounting principles in the United…show more content…
The going concern principle believes a company will stay in business for enough time to carry out its mission and will not go out of business in the near future. The matching principle requires companies to apply “accrual” basis to all accounting. For example, revenues are matched to expenses as they occur. An example would be: things are accounted for in the week that the sale happened and not when the commission is received. The revenue recognition principle works in a similar way. Expenses and sales are accounted for at time of purchase or sale, regardless of when payment is received. Materiality and conservatism control the accountant’s liberty to make decisions. Materiality permits the accountant a bit of freedom in deciding if an agreement is so immaterial that she or he may breach another accounting principle in the way it is recorded. This implies that financial statements oftentimes round to the nearest dollar, thousand or even million dollars depending on the scale of the company for better convenience. Conservatism means that if an accountant can record something in different ways, he or she must go with the way that outcomes in less net income. On the other hand, the International Financial Reporting Standards are the principles-based standards and explanations that have been implied by the International Accounting Standards Board or the IASB as a guideline for global financial reporting. The
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