Intermediate Accounting

1
Intermediate Accounting

• Carol Fischer

2
Intermediate Accounting

• Chapter One
• Setting Accounting Standards

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Financial Accounting

• Concerned with the way businesses communicate
  financial information to the public.
• Other Branches of accounting are designed to
  handle the internal informational needs of the
  enterprise.

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Financial Accounting

• Financial Accounting differs from other branches
  because
• guiding principals are subject to interpretation
• the FASB, rulemaking body, influenced by business
  and special interest groups
• The SEC exercises regulatory and enforcement
  authority

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Brief History of the SEC

• Created as a result of the stock market crash in
  1929 the crash resulted in the enactment of
  the Securities Acts of 1933 and 1934.
• In these acts the SEC was charged with the
  responsibility to prescribe accounting policies.
• Initially relied on AICPA to develop and enforce
  Standards

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American Institute of CPAs

• Committee on Accounting Procedure--Earliest
  Regulations were issued by the All CPA board--51
  Accounting Research Bulletins
• Accounting Principles Board--Formed to assist the
  CAP--consisting of primarily CPA but a few
  members of industry. Issued 31 Opinions--APB

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AICPA Continued

• Financial Accounting Standards Board--Replaced
  the 18-21 member APB. 7 highly paid members
  from industry. Not necessary to be a CPA
• Issues Standards and Interpretations
• Financial Accounting Concepts
• Technical Bulletins
• Emerging Issues Task Force Statements
• The FASB is the most influential body associated
  with the setting of standards.

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Accounting Standard Setting

• Parties Involved in addition to the FASB and SEC
• IRS --Internal Revenue Service
• AAA--American Accounting Association
• NAA--National Association of Accountants
• AICPA--American Institute of CPAs
• GASB--Governmental Accounting Standards Board
• FEI--Financial Executives Institute
• IMA--Institute of Management Accountants
• Look for International Standards to be developed