If you were given complete authority in the matter, how would you propose that GAAP should
be developed and enforced?
No one particular proposal is expected in answer to this question. The students proposals,
however, should be defensible relative t
In what way is the Securities and Exchange Commission concerned about and supportive of
accounting principles and standards?
The SEC has the power to prescribe, in whatever detail it desires, the accounting practices and
principles to be employed by
What is Rule 203 of the Code of Professional Conduct?
Rule 203 of the Code of Professional Conduct prohibits a member of the AICPA from expressing
an opinion that financial statements conform with GAAP if those statements contain a material
How are FASB preliminary views and FASB exposure drafts related to FASB statements?
The technical staff of the FASB conducts research on an identified accounting topic and prepares
a preliminary views that is released by the Board for public reactio
What is the purpose of FASB staff positions?
The chairman of the FASB was indicating that too much attention is put on the bottom line and
not enough on the development of quality products. Managers should be less concerned with
short-term results a
Briefly explain the meaning of decision-usefulness in the context of financial reporting?
Investors are interested in financial reporting because it provides information that is useful for
making decisions (referred to as the decision-usefulness app
Distinguish among Accounting Research Bulletins, Opinions of the Accounting Principles Board,
and Statements of the Financial Accounting Standards Board?
Accounting Research Bulletins were pronouncements on accounting practice issued by the
What was the Committee on Accounting Procedure, and what were its accomplishments and
The Committee on Accounting Procedure was a special committee of the American Institute of
CPAs that, between the years of 1939 and 1959, issued 51 Accou
Distinguish between FASB statements of financial accounting standards and FASB
statements of financial accounting concepts.?
Statements of financial accounting standards constitute generally accepted accounting principles
and dictate acceptable fina
Some individuals have indicated that the FASB must be cognizant of the economic consequences
of its pronouncements. What is meant by economic consequences? What dangers exist if
politics play too much of a role in the development of GAAP?
Explain the role of the Emerging Issues Task Force in establishing generally accepted accounting
The Emerging Issues Task Force often arrives at consensus conclusions on certain financial
reporting issues. These consensus conclusions are
The Sarbanes-Oxley Act was enacted to combat fraud and curb poor reporting practices. What
are some key provisions of this legislation?
The following are some of the key provisions of the Sarbanes-Oxley Act:
Establishes an oversight board for accoun
Academic access to the FASB Codification is available through university subscriptions,
obtained from the American
Accounting Association (at http:/aaahq.org/FASB/Access.cfm), for an annual fee of $150. This
subscription covers an
unlimited number of stud