ca1-2 - Copy - law of accounting, and must be obeyed. c....

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Michael McCormick Acg3103 CA1-2 a. The three objectives of financial reporting are (1) Is useful to present and potential investors and creditors and other user in make rational investment, credit, and similar decisions. (2) Assess the amounts timing, and uncertainty of prospective cash receipts. (3) And clearly portrays the economic resources of an enterprise, and the claims to those resources. (Kieso, 4) b. As per SFAC No 1. The level of sophistication expected of the users of financial information is, “The information should be comprehensible to those who have a reasonable understanding of business and economic activities and are willing to study the information with reasonable diligence.” FRP a. Key organizations in setting accounting standards are, SEC, FASB, AICPA, GASB, b. The GAAP have substantial authoritative support. (Kieso, 12). The GAAP is the
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Unformatted text preview: law of accounting, and must be obeyed. c. The historical overview of standard setting starts off with none, and after the stock market crash of 1929 the SEC was formed. The SEC permitted the public to make the rules, with SEC oversight. First came ALCPA from 1939 1960. The ALCPA Developed 51 pronouncements. From 1960-1973 was the APB, and the APB developed 31 opinions, and 4 statements. Today was have the FASB (class notes) d. The authority for compliance to GAAP is AICPAs Accounting interpretations, FASBs Implementations guides (Q and A), and Widely recognized and prevalent industry practices. (Kieso, 12). The main authority, the body that is watching everyone is the government i.e. SEC....
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This note was uploaded on 07/04/2011 for the course ACG 101 taught by Professor Burnett during the Spring '09 term at Edison State College.

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