Chapter 1

Question 1

AICPA

Answer 1

American Institute of Certified Public Accountants. The national professional organization of practicing CPAs and has been an important contributor to the development of GAAP.

Question 2

CAP

Answer 2

Committee on Accounting Procedure. Committee established by the AICPA at the urging of the SEC to deal with accounting problems. They issued 51 Accounting Research Bulletins and was in play from 1939-1959.

Question 3

ARB

Answer 3

Accounting Research Bulletins. Dealt with a variety of accounting problems, but this problem-by-problem approach failed to provide the needed structured body of accounting principles

Question 4

APB

Answer 4

Accounting Principles Board - Private standard-setting organization that replaced the CAP. Their mission was to develop an overall conceptual framework. It consisted of 18 - 21 members. It’s official pronouncements were called APB Opinions. They issued 31 of these in its lifetime from 1959-1973.

Question 5

FAF

Answer 5

Financial Accounting Foundation - Selects members of FASB and GASB, funds their activities, and exercises general oversight.

Question 6

FASAC

Answer 6

Financial Accounting Standards Advisory Council - Consults with the FASB on major policy and technical issues and helps select task force members

Question 7

SOP

Answer 7

Statements of Position - Put out by the AICPA and provide guidance on financial reporting topics until the FASB sets guides or provide free-standing guidance.

Question 8

GAAP

Answer 8

Generally Accepted Accounting Principles - Standards and rules for financial reporting

Question 9

FASB

Answer 9

Financial Accounting Standards Board - Replaced the APB in 1973. Makes regulations on how financial reporting should be done. Established GAAP.

Question 10

SEC

Answer 10

Securities and Exchange Commission - In charge of GAAP, but delegates to FASB

Question 11

IASB

Answer 11

International Accounting Standards Board - Equivalent to FASB, but for most other countries

Question 12

Due process

Answer 12

The system giving interested persons ample opportunity to make their views known.

Question 13

Two types of FASB pronouncements

Answer 13

Accounting Standards Updates: amendments to the Accounting Standards Codification
Fiancial Accounting Concepts: Part of the conceptual framework, it sets for fundamental objectives and concepts to be followed, rather than specific rules.

Question 14

IFRS

Answer 14

International Financial Reporting Standards - Issued by IASB. Over 115 countries use IFRS. European Union requires all companies in Europe to use the IFRS.