The Development of GAAP in the United States

Setting generally accepted write up principles These organizations influence the development of GAAP in the United States. United States Securities and deputize Com representation ( arcsecond) The SEC was created as a result of the Great Depression. At that time there was no structure vista accounting standards. The SEC encouraged the establishment of hidden standard-setting bodies through the AICPA and later the FASB, believing that the secret sector had the proper knowledge, resources, and talents. The SEC works closely with various private organizations setting GAAP, but does non set GAAP itself. American base of Certified Public Accountants (AICPA)In 1939, urged by the SEC, the AICPA appointed the Committee on accountancy Procedure (CAP). During the years 1939 to 1959 CAP issued 51 accountancy Research Bulletins that dealt with a variety of timely accounting problems. However, this problem-by-problem approach failed to develop the much necessitate structured body of acc ounting principles. Thus, in 1959, the AICPA created the Accounting Principles Board (APB), whose mission it was to develop an overall conceptual framework. It issued 31 opinions and was dissolved in 1973 for lack of productivity and failure to act promptly.After the creation of the FASB, the AICPA established the Accounting Standards executive director Committee (AcSEC). It publishes Audit and Accounting Guidelines, which summarizes the accounting practices of special(prenominal) industries (e. g. casinos, colleges, airlines, etc. ) and provides specific pleader on matters not addressed by FASB or GASB. Statements of Position, which provides guidance on financial reporting topics until the FASB or GASB sets standards on the issue. Practice Bulletins, which refer the AcSECs views on narrow financial reporting issues not considered by the FASB or the GASB. Financial Accounting Standards Board (FASB)Realizing the need to reform the APB, leaders in the accounting profession appoin ted a Study Group on the Establishment of Accounting Principles (commonly known as the Wheat Committee for its go Francis Wheat). This group determined that the APB must be dissolved and a virgin standard-setting structure be created. This structure is composed of three organizations the Financial Accounting Foundation (FAF, it selects members of the FASB, funds and oversees their activities), the Financial Accounting Standards Advisory Council (FASAC), and the major run organization in this structure the Financial Accounting Standards Board (FASB).FASB has 4 major types of publications Statements of Financial Accounting Standards the most authoritative GAAP setting publications. More than 150 have been issued to date. Statements of Financial Accounting Concepts first issued in 1978. They are part of the FASBs conceptual framework project and set forrader fundamental objectives and concepts that the FASB use in developing future standards. However, they are not a part of GAAP. There have been 7 concepts published to date. Interpretations transfigure or extend existing standards. There have been around 50 interpretations published to date.Technical Bulletins guidelines on applying standards, interpretations, and opinions. Usually solves some very specific accounting issue that will not have a significant, lasting effect. In 1984 the FASB created the Emerging Issues Task Force (EITF) which deals with new and unusual financial legal proceeding that have the potential to become common (e. g. accounting for Internet base companies). It acts more like a problem filter for the FASB the EITF deals with short-term, quickly solvable issues, leaving long-term, more pervasive problems for the FASB. Governmental Accounting Standards Board (GASB)