Weaknesses of CAP

1
Weaknesses of CAP

• Part-time committee members
• Lack of independence
• Not explicitly recognized by SEC
• Lack of full-time professional staff

2
Weaknesses of CAP (cont.)

• Pragmatic approach
• Lack of conceptual framework
• No comprehensive statement of accounting
  principles
• Inconsistency (e.g., ARB 44 ARB 44 Rev.)
• No research division

3
Weaknesses of APB

• Part-time Board members
• Lack of independence
• Not explicitly recognized by SEC
• Inadequate full-time professional staff

4
Weaknesses of APB (cont.)

• Investment tax fiasco
• Pragmatic approach
• Lack of conceptual framework
• No comprehensive statement of accounting
  principles

5
FASB 1973-????

• Trueblood Wheat Commissions
• 7 full-time board members
• Operational July 1973
• Independent
• Full-time staff
• Explicitly recognized by SEC (ASR 150)
• Rule 203 acknowledgement
• Conceptual framework

6
Pronouncements of FASB

• Rule 203 Category A
• FASB Statements
• FASB Interpretations

7
Other Pronouncements Issued by or Associated
with FASB

• FASB Statements of Financial Accounting Concepts
• FASB Technical Bulletins
• EITF Abstracts
• FASB Staff Positions
• FASB Staff QAs

8
Rule 203 Category A

• FASB Statements
• FASB Interpretations
• APB Opinions
• AICPA Acctg. Research Bulletins

9
Rule 203 Category B

• FASB Technical Bulletins
• and if cleared by the FASB
• AICPA Industry Audit Accounting Guides
• AICPA Statements of Position

10
Rule 203 Category C

• Consensus positions of the EITF
• and if cleared by the FASB
• AICPA Practice Bulletins

11
Rule 203 Category D

• AICPA accounting interpretations
• FASB staff Q As
• Industry practices widely recognized and
  prevalent

12
Rule 203 Category E

• Other accounting literature, including
• FASB Concepts Statements
• IASB Statements
• AICPA Technical Practice Aids
• Accounting textbooks and articles
• AICPA Issues Papers
• Other