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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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One of your friends remarks, “I understand that before voting on an Update to Accounting Standards, the FASB allows written comments and oral presentations in which interested parties can lobby for a particular ruling. Do you think this is a good idea?”

Required:

Prepare a written response that discusses the advantages and disadvantages of the FASB’s allowing interested parties to provide input to its deliberative process.

To determine

Discuss the advantages and disadvantages of allowing interested parties providing inputs by FASB in the deliberative process while updating the Accounting Standards.

Explanation

Most people agree that it is a better idea for the FASB to allow vested interest parties to have written or oral deliberation while lobbying for any particular ruling in the accounting standards. But there are some advantages and disadvantages associated with this practice, they are discussed as below;

Advantages:

  • It enable FASB to have inputs from multiple perspectives.
  • It provide an opportunity to the users informing their concerns.
  • It provides an opportunity to the preparers informing their concerns.
  • It provides an opportunity to the auditors informing their concerns.
  • It could avoid the criticism of not heeding to the interested parties.
  • It provides opportunity for all interested parties to be heard.
  • It provides opportunity for the users to be more fair to the new rulings...

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