Assignment Question 1
“The mere discovery of a problem is not sufficient to assure that the Financial Accounting
Standards Board will undertake its solution … There must be a suitably high likelihood that the Board can resolve the issues in a manner that will be acceptable to the constituency—without some prior sense of the likelihood that the Board members will be able to reach a consensus, it is generally not advisable to undertake a formal project”.
Introduction:
The above quotation has been taken from the book of Professor Miller which was published in 1986. Professor says that identifying a problem in the audit process is no guarantee that a solution will be found to the problem. The problem that is referred to in the above quotation is the problems that emerge during an audit that is performed in a business entity.
What professor Miller tries to explain is that even if the issue is placed in front of the
Financial Accounting Standards Board there is no surety that the Board will take action or responsibility in finding a solution to the problem. When a problem is presented to the Financial Accounting Standards Board there must be reason to believe that the
Board members will be able to understand the problem collectively and create a solution to the problem by harmony, if however the chances are not there then an individual or an audit firm should not take up a project formally to try and find resolution though the Financial Accounting Standards Board.
Financial Accounting Standards Board
The main responsibilities of the Board are to establish the financial accounting procedures for the public companies and to improve the existing procedures that exist.
The aim is to provide useful information to the investors of companies so that the investments that the public makes are sound investments that will provide financial returns to the