CH 5 Review

Question 1

what is non authoritative guidance

Answer 1

any source of accounting guidance or practice not included in the FASB codification

Question 2

what kind of guidance is not considered GAAP

Answer 2

nonauthoritative guidance

Question 3

can non authoritative guidance be used by myself to support a clean audit opinion

Answer 3

no

Question 4

Examples of nonauthoritative guidance

Answer 4

Industry practices, FASB concepts statements, AICPA Issues Papers, IFRS, pronouncements of professional associations/ regulators, textbooks

Question 5

some things that nonauthoritative sources can do

Answer 5

• interpret complex areas within GAAP
• offer additional context, such as helping researchers understand the intent of Codification requirements

Question 6

Who uses FASB’s conceptual framework

Answer 6

the FASB and practitioners

Question 7

how does the FASB use conceptual framework

Answer 7

as a conceptual foundation for setting new standards

Question 8

how do practitioners use the conceptual framework

Answer 8

as principle when other GAAP not on point

Question 9

is FASB conceptual framework authoritative?

Answer 9

no

Question 10

what standard in the conceptual framework is CON 8, Ch 1&3

Answer 10

Objectives and Qualitative Characteristics

Question 11

what standard in the conceptual framework is CON 8, Ch 8

Answer 11

Notes to Financial Statements

Question 12

what standard in the conceptual framework is CON 5

Answer 12

recognition and measurement in financial statements

Question 13

what standard in the conceptual framework is CON 6

Answer 13

Elements of Financial Statements

Question 14

what standard in the conceptual framework is CON 7

Answer 14

Cash flow information and present value

Question 15

When are Accounting Standards Updates (ASUs) issued

Answer 15

periodically by the FASB

Question 16

Why are ASUs issued?

Answer 16

to make changes to the Codification

Question 17

Are ASUs considered authoritative?

Answer 17

NO, not in their own right

Question 18

What are some examples of pre-codification guidance

Answer 18

FASB statements, EITF Abstracts, APB Opinions and Accounting Research Bulletins

Question 19

What is the pre-codification standards

Answer 19

comprise guidance in effect at the time of the codification’s creation (2009)

Question 20

why might an accounting researcher access a pre-codification standard or ASU

Answer 20

grandfathered content, basis for conclusions, historical guidance

Question 21

What is a firm technical specialist

Answer 21

often write interpretive guidance for their firm and for clients’ use in applying complex topics

Question 22

examples of firm technical specialists

Answer 22

derivatives specialist, revenue specialists, leasing specialists, securitization specialists

Question 23

interpretive guidance includes

Answer 23

• firm research db
• firm published guidebooks by topic
• technical accounting alerts and hot topics whitepapers

Question 24

examples of large accounting firm accounting research databases

Answer 24

• EY Atlas
• Deloitte’s Accounting Research Tool (DART)
• CCH’s Accounting Research Manager

Question 25

what are accounting manuals

Answer 25

they are written by the firm sponsoring the database which couple authoritative requirements with the firm's own interpretive guidnace

Question 26

who writes guidebook

Answer 26

major public accounting firms

Question 27

what do guidebooks do

Answer 27

offer clarity on complex topics, such as derivatives, fair value, consolidation, pension accounting and more

Question 28

are guidebooks authoritative?

Answer 28

no

Question 29

what is a possible problem with guidebooks

Answer 29

they can be outdated

Question 30

what interpretive guidance to turn to for emerging issues or newly issues FASB requirements

Answer 30

- firm white papers - firm technical updates

Question 31

What are some AICPA resources that may assist in interpreting GAAP requirements

Answer 31

Audit and Accounting (A &A) guides US GAAP FS Technical Hotline Technical questions and answers

Question 32

What is the Financial reporting framework for small and medium sized entities

Answer 32

it is a non-GAAP Fin reporting framework offered by the AICPA

Question 33

what is peer benchmarking

Answer 33

common practice in which companies(and their auditors) review the reporting and disclosures of others within a company's industry

Question 34

why do peer benchmarking?

Answer 34

- to see how peers have implemented the latest FASB guidance - identify best practices, consistency with peer group

Question 35

where do researchers locate peer company financial statements

Answer 35

SEC Edgar's DB or on peer companies own sites

Question 36

what is more important: following GAAP or following peers?

Answer 36

GAAP

Question 37

what is in the SEC's edgar db

Answer 37

10-K, 10-Q, 8-K, comment and response letters

Question 38

Is International Financial Reporting Standards authoritative or non authoritative?

Answer 38

non

Question 39

ideally, nonauthoritative guidance should be cited _________ to Cod references

Answer 39

in addition to

Question 40

cite nonauthoritative guidance if it's expected to:

Answer 40

enhance understanding of the Codification requirements

Question 41

required elements when citing nonauthoritative guidance (FASB Concepts Statement)

Answer 41

type of standard full title of standard, in italics paragraph number abbreviation to be used in future references (CON 6)

Question 42

required elements when citing nonauthoritative guidance (guidebooks)

Answer 42

- title of the guide - author of firm publishing the guide - year of publication - section and page number