...Accounting Standards Board Paper Cassandra Fatchett ACC/541 Monday, March 23, 2015 Christine Errico Accounting Standards Board Paper International convergence of accounting standards is not exactly a new idea. In the 1950’s, in response to economic integration post World War II, initial efforts focused on reducing the differences among accounting principles used in major capital markets around the world. By the 1990's, 40 years later, the idea of harmonization had been replaced by the concept of convergence. Rather than all accounting principles complement each other, it was decided that a new set of internationally recognized accounting standards would be used in all major capital markets. Convergence is described as making global accounting standards as similar as possible. All users of financial information should benefit from the increased comparability of the convergence of financial accounting standards. The FASB has always been on a mission to improve the financial accounting standards in the U.S. for the benefit of investors, lenders, creditors, and all other users of financial statements. They believe that pursuing convergence is compliant with that mission. In 2008, both the FASB and the IASB issued a memorandum of understanding on the convergence of accounting standards called the The Norwalk Agreement. It outlined the agreement made by both entities to address accounting practices that were considered to be deficient in the U.S., GAAP, as well as practices...
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...Accounting Standards Board Paper Financial Accounting Standard Board (FASB) is a private, not-for-profit organization responsible for setting accounting standard for public companies in the United States. It was created in 1973 as a replacement for the Committee on Accounting (CAP) and the Accounting Principle Board (APB). Financial Accounting Standard Board mission is stated as “to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investor and other users of financial reports.” The International Accounting Standard Board (IASB) is an independent, privately funded accounting standard-setter based out of England. It replaces the International Accounting Standard Committee and was founded April 1, 2001. International Accounting Standard Board is responsible for development and publication of International Financial Reporting Standard (IFRS). The International Accounting Standard Board mission is to converged global accounting standard; develop a single set of high quality, understandable, and enforceable global accounting standards; provide high quality transparent and comparable information in financial statement and help the world’s capital market and other financial statement user make sound economic decision. Since more companies are doing business and seeking financing from outside their home countries, investors from other countries are now reading...
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...Accounting Standards Boards Paper Kristi Crow ACC/541 Accounting Theory and Research September 30, 2015 Valerie Turnbow The Financial Accounting Standards Board (FASB) is the accounting board used in the United States. The FASB is tasked with improving and establishing the standards of financial accounting and reports for education of the public (Schroeder, Clarke, Cathey, 2011). The International Accounting Standards Board (IASB) is the accounting board used to simplify the process for those seeking capital or investment opportunities across national boundaries. In this paper we will discuss the history and relationship of both the FASB and the IASB. Additionally we will discuss how the Masters of Science in Accountancy (MSA) will prepare students for a career in the vocation of accounting. FASB and IASB history The FASB was created in 1973 after the Wheat Committee, chaired by Francis Wheat suggested that the Accounting Principles Board be abolished and a new board created. The FASB was to be comprised of representatives from a variety of organizations and be full-time paid employees. The FASB has an advisory council that will keep them updated on major policy issues, as well as the selection of task forces. This council is known as the Financial Accounting Standards Advisory Council (FASAC). The IASB was also created in 1973. The IASB is an independent private sector body. The IASB has two main objectives. The first being to formulate and publish in...
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...Accounting Standard Board Paper ACC/541 June 18, 2012 Accounting Standard Board Paper In the world of accounting there needs to be standards for all of the countries, whether they are in the United States of Overseas. The accounting boards will help with making sure that all of the information is done correctly and are reported in a consistent way so that investors can determine what company is better to invest in. The two types of accounting standards board that are being discussed is the International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB). The first thing that needs to be discussed is the history of the two boards. The history will explain the relationship between the IASB and FASB. There will also be a discussion on how the University of Phoenix Master in Science of Accounting program is related to the IASB and FASB. The Accounting Principles Board (APB) was removed and replaced with the FASB in 1972. They determined that all of the members of the FASB were to be full-time paid employees which the APB were only part-time and were not paid. After 1973, the FASB was given the official approval of being in charge of issuing accounting standards (Schroeder, Clark, & Cathey, 2011). The FASB consists of the American Accounting Association, AICPA, Financial Executives Institute, National Association of Accountants, and the Financial Analysts Federation (Schroeder, Clark, & Cathey, 2011). In 1997, the FASB board of trustees...
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...Accounting Standards Boards Paper In 2002, a formal agreement took place to work toward the merging and standardization of international financial reporting rules. The two entities are described in further detail in the following paper along with the progress of the project. This paper also details how the completion of the MSA program prepares students for a professional life within the accounting vocation. The globalization of the business environment over the last decade has brought about the importance of transnational financial reporting. Users of this information must be able to understand not only the accounting principles used by the company, but the language of the country where they reside, and the currency used in preparation of the financial statements. “If investors and creditors cannot obtain understandable financial information about companies that operate in foreign countries, they are not likely to invest in or lend money” (Schroeder, Clark & Cathey, 2011). The result is a move by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) to harmonize and eventually converge accounting standards commonly used in different countries. History of the relationship between the FASB and the IASB The IASB was formed in 1973 and is based out of London, England. They develop and enforce financial reporting standards for publicly held companies. The first efforts to harmonize domestic and international financial reporting...
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...Accounting Standards Boards Paper Accounting Standards Boards Paper This paper will discuss the relationship of the two accounting boards, International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). Both groups are working on a venture known as the convergent project. The convergent project is an attempt by the IASB and FASB to eliminate differences between the International Financial Reporting Standards and the US GAAP. This paper will also explain how the MSA program will help students to prepare for a career in the accounting field. The Security Exchange Commission (SEC) was established by the Security Exchange Act in 1934. The SEC is the authority to establish financial accounting standards for publically held companies in the United States. The FASB was established in 1973 as the official body charged with issuing accounting standards. It is a private organization and is documented by the American Institute of Certified Public Accountants as well as the SEC. The mission of the FASB “is to establish and improve standards of financial accounting and reporting” (FASB.ORG, 2014). The FASB also oversees that reporting from publically held companies provide useful information investors, auditors and creditors, as well as anyone else who needs the information. The FASB issues Financial Accounting Standards (FAS) and other accounting pronouncements that make up the Generally Accepted Accounting Procedure. The GAAP is...
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...Accounting Standard Board Paper ACC/541 June 18, 2012 Accounting Standard Board Paper In the world of accounting there needs to be standards for all of the countries, whether they are in the United States of Overseas. The accounting boards will help with making sure that all of the information is done correctly and are reported in a consistent way so that investors can determine what company is better to invest in. The two types of accounting standards board that are being discussed is the International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB). The first thing that needs to be discussed is the history of the two boards. The history will explain the relationship between the IASB and FASB. There will also be a discussion on how the University of Phoenix Master in Science of Accounting program is related to the IASB and FASB. The Accounting Principles Board (APB) was removed and replaced with the FASB in 1972. They determined that all of the members of the FASB were to be full-time paid employees which the APB were only part-time and were not paid. After 1973, the FASB was given the official approval of being in charge of issuing accounting standards (Schroeder, Clark, & Cathey, 2011). The FASB consists of the American Accounting Association, AICPA, Financial Executives Institute, National Association of Accountants, and the Financial Analysts Federation (Schroeder, Clark, & Cathey, 2011). In 1997, the FASB board of trustees...
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...Accounting Standards Boards Paper Cynthia Danford Accounting Theory & Research ACC/541 Christine Errico April 30, 2012 Accounting Standards Boards Increased globalization in the business world has brought to fore some of the issues and challenges that multinational businesses face in financial recording and reporting of foreign based operations. With operations based in different countries that operate under different accounting principles and with varying currencies, there has been a need for the accounting principles and standards to be converged. This has in the past nine years seen the accounting policy making suggesting a complete overhaul in the way financial statements are reported and a convergence between the US's generally accepted accounting principles (US GAAP) and the International Financial Reporting Standards (IFRS). This has been through various meetings between the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB), two boards which determine these accounting standards. This paper therefore evaluates the history of the two boards and their relationship and looks at IASB equivalents to FASB original pronouncements. It also describes how a Master of Science in Accounting would prepare a student for an accounting profession. History of...
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...Accounting Standard Board Paper ACC/541 June 18, 2012 Accounting Standard Board Paper In the world of accounting there needs to be standards for all of the countries, whether they are in the United States of Overseas. The accounting boards will help with making sure that all of the information is done correctly and are reported in a consistent way so that investors can determine what company is better to invest in. The two types of accounting standards board that are being discussed is the International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB). The first thing that needs to be discussed is the history of the two boards. The history will explain the relationship between the IASB and FASB. There will also be a discussion on how the University of Phoenix Master in Science of Accounting program is related to the IASB and FASB. The Accounting Principles Board (APB) was removed and replaced with the FASB in 1972. They determined that all of the members of the FASB were to be full-time paid employees which the APB were only part-time and were not paid. After 1973, the FASB was given the official approval of being in charge of issuing accounting standards (Schroeder, Clark, & Cathey, 2011). The FASB consists of the American Accounting Association, AICPA, Financial Executives Institute, National Association of Accountants, and the Financial Analysts Federation (Schroeder, Clark, & Cathey, 2011). In 1997, the FASB board of trustees...
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...Accounting Standards Board Paper Katherine Meyer ACC/ 541 Kenneth Burton July 30, 2012 The Accounting Standards Board and the Financial Accounting Standards Board have been critical in modernizing the accounting field. The Accounting Standards Board was created out of criticism of the field and the Financial Accounting Standards Board was created out of criticism of the Accounting Standards Board. The histories of the boards have improved the accounting profession and have made the flow of information more fluid. Around 1959 the methods that were used to formulate accounting principles were in question because the methods had not arisen from research or had been based on theory. About the same time, the CAP was being questioned for issuing inconsistent standards. The CAP was made up of part- time members whose independence quickly came into question. The members of the CAP were also required to also be members of the AICPA and it was not long before accountants and the financial statement users were demanding a wider representation in the development of accounting principles. In response to the demand the AICPA forms the Accounting Principles Board or the APB. The APB was made up of seventeen to twenty- one accounting professionals, individuals from the industry, the government, and academia. The objectives of the APB were to advance the written expression of the generally accepted accounting principles and to narrow the areas of differences in appropriate practice...
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...Accounting Standards Board Accounting Standards Boards Paper Elena Thomas ACC/541 January 10, 2011 Accounting Standards Boards Paper In the 1930’s, the financial community was realizing a need for a uniform accounting standard especially for its publicly traded companies. The SEC was given the authority by the Securities Act of 1933 to create accounting standards and determine the accounting disclosures (M.E. Sharpe, 2006). The SEC deferred to the accounting profession the task of creating auditing standards. The New York Stock exchange and the now American Institute of Certified Public Accountants (AICPA) together published guidelines for audits. In 1971, the AICPA created a committee which was chaired by Francis M. Wheat and comprised of seven members to make recommendations on how to better the accounting principles ("US Financial Accounting Standards Board FASB; IASB and US FASB Complete First Stage of Conceptual Framework," 2010). This committee recommended that a full time board be developed to create set accounting standards. This led to the development of the Financial Accounting Standards Board (FASB) in 1973 within the Financial Accounting Foundation ("US Financial Accounting Standards Board FASB; IASB and US FASB Complete First Stage of Conceptual Framework," 2010). The function of the FASB is to establish and publish the accounting principles. The FASB issues three major types of pronouncements: 1) Standards, Interpretations, and...
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...Accounting Standards Boards Accounting Standards Boards After the stock market crash of 1929, there were stresses on the accounting profession to institute uniform accounting standards. Thus the evolution of financial accounting and reporting standards came into existence. The development of this uniform standard was not easy. However, due to a number of individuals feeling that they were faced with incomplete and inaccurate financial statement information, a standard needed to be established and enforced. Inaccuracy and deception led to a number of negative events such as the inflated stock prices which ultimately factored in to the stock market crash and the following great depression. Financial Accounting Standards Board The Financial Accounting Standards Board was established in 1973. The FASB’s mission was to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors and users of financial information. To accomplish this goal the FASB sought to: “improve the usefulness of financial reporting by focusing on the primary characteristics of relevance and reliability and on the qualities of comparability and consistency; keep standards current to reflect changes in methods of doing business and changes on the economic environment; consider promptly any significant areas of deficiency in financial reporting that might be improved through the standard-setting process; promote the...
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...Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) Analysis Paper Accountants or individuals, who put the financial statements together, need the knowledge of the two different accounting standards board. The Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB) differ from each other and are similar in different ways and individuals need knowledge of the differences and similarities. GASB and FASB allow use of the modified accrual basis of accounting or the full accrual accounting for government and not-for-profit organizations. Knowing the differences between the two methods and the meaning are important. GASB and FASB Similarities GASB and FASB accounting are sets of objectives that proprietorship, government, and not-for-profit organizations follow in preparing financial statements. According to Weygandt (2008, p. 17) “both the GASB and the FASB have established objectives that circumscribe the functions of financial reports.” GASB and FASB objectives show whether a company is making enough profit to pay for expenses throughout the year, allows investors information to decide whether to invest or not, and how well the company budget complied throughout the year. Also, the two accounting standard boards show whether management is complying with all aspects of the objectives. GASB and FASB accounting have differences that individuals need knowledge about to prepare financial statements...
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...International Accounting Standards Board Introduction Accounting plays a very significant role in the success of any business organization as it helps its users make decisions. Different accounting principles grew out of the divergent economic and social environments of various nations and regions. Difference among national accounting become more disconcerting when trade barriers between nations were reduced due to international cooperation developments. Efforts have increased during the past decade to move nations toward using international standards. The International Accounting Standards Board (IASB) is an organization that regulates the accounting standards which are accepted globally by almost all the countries in the world. This paper will first discuss the history of IASB. Next it will explain the structure of IASB. After that, the paper will talk about how International Financial Reporting Standards (IFRS) are created. Finally, it will describe the effort to converge IFRS with Generally Accepted Accounting Principles (GAAP). History of IASB International Accounting Standards Board was first known as International Accounting Standard Committee (IASC) which existed from 1973 to 2001. It was responsible for developing the International Accounting Standards (IASs) and promoting the use and application of these standards. After nearly 25 years of achievement, the IASC concluded that it must find a way to converge between national accounting standards and practices...
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...Proposed Statement of Financial Accounting Concepts Issued: March 11, 2010 Comments Due: July 16, 2010 Conceptual Framework for Financial Reporting: The Reporting Entity This Exposure Draft of a proposed Statement of Financial Accounting Concepts is issued by the Board for public comment. Written comments should be addressed to: Technical Director File Reference No. 1770-100 Responses from interested parties wishing to comment on the Exposure Draft must be received in writing by July 16, 2010. Interested parties should submit their comments by email to director@fasb.org, File Reference No. 1770-100. Those without email may send their comments to the “Technical Director, File Reference No. 1770-100, FASB, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116.” Do not send responses by fax. Please send only one comment letter to either the FASB or the International Accounting Standards Board (IASB), which is also requesting comments on this jointly issued Exposure Draft. The FASB and the IASB will share and consider jointly all comment letters received. Comments are most helpful if they: a. b. c. Indicate the specific paragraph or paragraphs to which the comments relate Contain a clear rationale Include any alternative the Boards should consider. All comments received constitute part of the FASB’s public file. The FASB will make all comments publicly available by posting them to its website and by making them available in its public reference room in Norwalk, Connecticut. An...
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