1. FASB & Standard Setting Flashcards
What is the AICPA?
Professional organization for participating CPAs
What doe the SEC do?
Administers the U.S. securities laws, most notably the Securities Act of 1933 and the Securities Exchange Act of 1934 as well as others
What is the main purpose of the SEC?
Promote efficient allocation of capital by maintaining open, orderly, and fair securities markets
What comprises U.S. GAAP?
FASB Accounting Standards Codification comprise authoritative U.S. GAAP for publicly traded companies.
SEC pronouncements are also GAAP for publicly traded entities.
What is the role of the FAF (Financial Accounting Foundation)?
Exercises oversight of the FASB, appoints members of the FASB, and ensures funding.
What is the FASB?
Establishes financial accounting standards for business entities
What is the role of the FASAC (Financial Accounting Advisory Council)?
Provides guidance on major policy issues, project priorities, and the formation of task forces
What are the first 3 steps the FASB uses when issuing a new accounting standard?
- Considers whether to add a project to its agenda in consultation with the FAF
- Conducts research
- Holds a public hearing on the topic
What are the final 3 steps in the standard-setting process?
- Evaluate research and comments from interested parties and issue an exposure draft
- Solicit additional comments
- Finalize new accounting guidance and issue ASUs (Accounting Standards Updates)
How do user groups influence the outcome of the FASB standards?
By providing input during the due process procedure
