The profession has developed GAAP that present fairly, clearly and completely the financial operatio

1
Generally Accepted Accounting Principles (GAAP)

• The profession has developed GAAP that present
  fairly, clearly and completely the financial
  operations of the enterprise.
• GAAP consist of authoritative pronouncements
  issued by certain accounting bodies.

2
The Standard Setting Process Parties Involved

• Securities and Exchange Commission (SEC)
• American Institute of Certified Public
  Accountants (AICPA)
• Financial Accounting Standards Board (FASB)
• See next page for types of pronouncements
• FASB Emerging Issues Task Force (EITF)
• Governmental Accounting Standards Board (GASB)

3
Major Types of FASB Pronouncements

• Standards and Interpretations
• Financial Accounting Concepts
• Technical Bulletins
• Emerging Issues Task Force Statements

4
House of GAAP
5
FASBDue Process (except for EITF statements)
6
FASBDue Process
7
Organizational Structure for Setting Standards
8
International Accounting Standards

• The International Accounting Standards Committee
  (IASC) was formed in 1973.
• The objective was to narrow divergence in
  international financial reporting.
• There are many similarities between U.S. and
  International accounting standards.
• The concern is that international standards may
  not be as rigorous as U.S. standards.