FAR - FASB - Role & Standard Setting Process - FASB and Standard Setting Flashcards
What does the Securities and Exchange Commission (SEC) do?
It administers the US securities laws, most notably the Securities of Act of 1933 and the Securities Exchange Act of 1934, as well as others.
How do user groups influence the outcome of the Financial Accounting Standards Board (FASB) standards?
Users influence standards by providing input during the due process procedure.
What is the main purpose of the SEC?
The main purpose of the SEC is to promote efficient allocation of capital by maintaining open, orderly, and fair securities markets.
What is the American Institute of Certified Public Accountants (AICPA)?
The AICPA is the professional organization for participating CPAs.
What is the role of the Financial Accounting Foundation (FAF)?
The FAF excersises oversight of the FASB, appoints the members of the FASB, and ensures funding.
What comprises US Generally Accepted Accounting Principles (GAAP)?
The FASB Standards Codification, comprise authoritative US GAAP for publicly traded companies; SEC pronouncements are also GAAP.
What is the role of the Financial Accounting Advisory Council (FASAC)?
The FASAC provides guidance on major policy issues, project priorities, and the formation of task forces.
What is the FASB?
The FASB establishes financial accounting standards for business entities.
What are the first three steps the FASB uses when issuing a new accounting standard?
1) Considers whether to add a project to its agenda in consultation with the FAF 2) conducts research 3) holds a public hearing on the topic.
What are the final three steps in the standard setting process?
1) Evaluate research and comments from interested parties and issues an exposure draft 2) solicit additional comments 3) finalize new accounting guidance and issues Accounting Standard Update (ASU).
