Chapter 1 Stice Flashcards
How did GAAP Evolve
Start with Stock Market crash of 1929, SEC formed 1933 and 1934 acts
Committee on Accounting Procedures CAP
1939-1959 Pronouncements: accounting research bulletins
Accounting Principles Board APB
1959-1973 Pronouncements APB Opinions
Financial Accounting Standards Board FASB
Begin in 1973-Is the current standards, Pronouncments: Statements of Financial Accounting Standards or SFAS
SEC
Securities and Exchange Commission-Established standardize Accounting. Granted legal authority to establish GAAP. Tends to defer setting GAAP to the accounting profession. Governs the issue and trading securities.
SEC Requirements
Requires annual, quarterly, and special event filings (10-K(annual), 10-Q(quarterly), 8-K(any significant information that should be disclosed) respectively)
SEC Standards
Issues its own standards, Financial Reporting Releases FRR
SEC interpretations
Staff Accounting Bulletins SAB
What does FASB stand for?
Financial Accounting Standards Board.
FASB
Private-sector body responsible for establishment of U.S. accounting standards also known as GAAP
How many full time members are employeed by FASB
7 full time members trawn from a variety ofbackgrounds- auditing, corporate accounting, financial, and academia. Members are required to sever all connections with their institutions prior to assuming membership on the board
Who appoints new members to the FASB
Appointng new members is done by the Financial Accounting Foundation FAF
SFAS?
SFAS -Statement of Financial accounting standards-Guidance on specific technical accounting and reporting issues.
SFAC?
Statements of Financial Accounting Concepts-Broad conceptual Framework-Serves as basis for developing SFAS
EITF?
Emerging Issues Task Force-Guidance on issues, generally industry specific, for things taht need quick resolution (surrogate GAAP until issue addressed)
FASB’s Process?
Process is lengthy and incluedes, hold meetings, develop preliminary views report; review public comment letters, develop exposure drafts (ED); review of more public comments; then issue SFAS, revise ED, or abandon project.