Chapter 3.1, Problem 3.1RQ

Summary Introduction

To discuss:

Role of the GAAP, the FASB and the PCAOB in the financial reporting activities of public companies.

Introduction:

Financial reporting is one of the core areas where the malfunctioning of financial statements is evolved. To control these malfunctioning new legislations and rules have been passed control the scandals and implemented penalties for the fraudulent activities.

For the smooth and efficient functioning of financial reporting and to prevent malpractices, the Generally Accepted Accounting Procedures (GAAP), the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB) play a significant role in financial reporting of public companies.