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Why did the sec delegate its task of setting accounting standards to the private sector?
The SEC delegated the task of setting accounting standards to the private sector to promote efficiency, leverage expertise, and foster innovation in the development of accounting principles. By allowing organizations like the Financial Accounting Standards Board (FASB) to take the lead, the SEC aimed to create standards that are more responsive to the needs of businesses and investors. This approach also helps to ensure that the standards are developed by professionals who are closely familiar with the complexities of financial reporting. Ultimately, it allows for a more flexible and adaptive regulatory environment.
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What problems arise in setting accounting standards?
explain accounting policy involves politics?
What authority for compliance with GAAP has existed throughout the period of standard settings?
The Financial Accounting Foundation (FAF) is the private-sector organization with responsibility for the oversight, administration, and finances of the Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), and their advisory councils, the Financial Accounting Standards Advisory Council (FASAC) and the Governmental Accounting Standards Advisory Council (GASAC). The FAF selects the members of the standard-setting Boards and Councils, and protects the independence of the Boards.
What are the two primary organizations in the US that are responsible for setting standards related to the preparation of accounting information?
Financial Accounting Standards Board (FASB) and Public Company Accounting Oversight Board (PCAOB)
Is accounting standard setting political in nature?
The setting of accounting standards and best practices is not political in nature. It is intended to ensure integrity and consistency throughout the profession.
Why is hierarchy of generally accepted accounting principles needed?
Accounting and financial reporting guidance is provided not only by the two major accounting standards-setting bodies, but also by the AICPA, the staffs of the accounting standards-setting bodies, and even professional literature. Because of the heavy workloads of the standards-setting bodies, they may not have issued guidance on a particular issue of concern to a practitioner. A hierarchy of generally accepted accounting principles allows a practitioner to look to the guidance of other bodies in the event the Board with jurisdiction has not issued a standard on a particular matter.
When was the FASB founded?
The Financial Accounting Standards Board (FASB) was founded in 1973 and was the very first international standards-setting board that was ever founded.
The bodies that make up the International Accounting Standards?
The International Accounting Standards Board (IASB) is an independent group of 15 experts with an appropriate mix of recent practical experience of standard-setting, or of the user, accounting, academic or preparer communities.Source: IASB website
Who is responsible for setting auditing standards for audits of publicly-traded companies?
PCOAB Public Company Accounting Oversight Board
What were the historical antecedents to the Financial Accounting Standards Board?
The first two standard-setting organizations in the United States were the Committee on Accounting Procedure (CAP), which was established in 1938, and the Accounting Principles Board (APB), which replaced the CAP in 1959
What is the fourth method the GASB uses to establish standards?
Consider significant areas of accounting and financial reporting that can be improved through the standard-setting process.
What is the primary accounting setting body in the US?
The FASBis the primary accounting setting body in the US
What is meant by economic consequences in accounting standard-setting?
What is the Economic consequence of accounting standard-setting
