The Cap Issue Accounting Standards

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).

| (TCO D) One criticism not normally aimed at a balance sheet prepared using current accounting and reporting standards is

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).

Research: The Financial Accounting Standards Board (FASB) was founded in 1973 as a private and independent organization governed by the Securities Exchange Commission (SEC). The organization’s primary purpose is to establish the rules and standards of Generally Accepted Accounting Principles (GAAP) for the interest of the public. (“Facts about FASB”) “Since its inception in 1973, the FASB has issued 168 Statements of Financial Accounting Standards and a series of concepts statements”. (Facts about FASB, n.d.) The FASB's mission is "to establish and improve standards of financial accounting and reporting for the guidance and education of the public,

This thesis will discuss the proposed changes of pensions and the new updated leases issued by FASB, which are important issues for entities such as corporations. FASB is the Financial Accounting Standards Board. It is a seven-member independent board consisting of accounting professionals who establish and communicate standards of financial accounting and reporting in the United States. FASB was created to provide users accurate information in one location. Recently, FASB developed the FASB Codification Research System: a web-based system allowing registered users to electronically research accounting issues.

The American Institute of Certified Public Accountants currently has over 386, 00 members since founded in 1887, under the name American Association of Public Accountants. The AICPA is integral to rule making and standard setting in the CPA profession, as well as serves as an advocate before legislative bodies and public interests groups("American Institute of Certified Public Accountants", 2010). In 1934 the New York stock exchange and the AICPA jointly published the Audits of Corporate Accounts of 1934, but a few short years later in 1938, the SEC voted to forgo this prerogative and allow the private sector to regulate its accounting practice—a policy that the commission has maintained to date. The AICPA's Committee on Accounting Procedure (CAP) assumed the financial accounting standard-setting role in 1939. The AICPA shifted this responsibility to its Accounting Principles Board (APB), equipped with its own research staff, in 1959.

One of the primary goals of the AICPA is to set and maintain professional accounting standards. These include setting the industry standards for ethics, auditing, tax practices, quality control and financial planning. However, the AICPA has stepped away from setting certain financial industry standards. For example, the AICPA originally set the generally accepted accounting principles (GAAP), but they relinquished control to the Financial Accounting Standards Board (FASB). In addition to this, the recently formed Public Company Accounting Oversight Board (PCAOB) now oversees financial audits of public companies, while the AICPA oversees private companies.

In some particular case, the accounting standards exactly are the problems. The legislation fixed it though asking those special institution, such as the Securities and commission and the Financial Accounting Standards Board, to tighten the accounting standards. For instants, the “special purpose entities”, that is a institution created by non-profit company , used to treat some particular risk facing by the company during their operating. Nevertheless, in Enron’s case, such institution seems just like useless decorations for their fraud. As required in Sarbanes-Oxley, the capital of Financial Accounting Standard Board should come from itself or public companies. Have no benefit-based relationship with accountants. It ensure that the membership of Financial Accounting Standard Board was independent from accounting operation. The rise in accounting restatements and earnings manipulation suggested that the deeper issue was not with the accounting standards themselves, but rather with the enforcement of those standards through auditing (Bratton, 2003). The Sarbanes-Oxley created a new institution in the first section named Public Company Accounting Oversight Board(PCAOB).

As the complexity of our financial economy develops it is important that our accounting standards progress in accordance. Accounting is very important to the development of the global and local economies. Accounting is basically the gathering, summarizing and presenting of financial information of an entity to interested internal, external and possible investors. This information should be presented in a non-bias way so that other people are able understand.

Section 101 of the Sarbanes-Oxley Act establishes the Public Company Accounting Oversights Board (PCAOB). The Board consists of five financially-literate members that are appointed for five-year terms. Three of these members must not be a CPA currently nor have been one in the past. The other two members must be, previously or currently, a certified public accountant. The main focus of this Board is (1) to register along with discipline accounting firms that prepare audit reports on companies that are public; (2) conduct inspections and/or investigations of registered accounting firms that audit public companies; and (3) establish audit and accounting standards.

Regulation is defined as a set of rules that is designed to control and govern conduct by authority (Deegan 2009, p.59). On the basis of this definition, Deegan (2009, p.59) has defined regulations relating to financial accounting as rules that are developed by independent authoritative body to govern the preparation of financial statements which are accounting standards. Since decades ago, there have been arguments for and against the existence of accounting regulations. With a stance of pro-regulation, this essay is going to examine the reasons that financial accounting and reporting should be regulated and the merits of accounting regulations.

The ASB previously had responsibility for establishing auditing standards for both public and private companies. Existing auditing standards were adopted by the PCAOB as interim auditing standards for public company audits.