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36 Cards in this Set
- Front
- Back
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Process of prepping finan repts for use by both internal and external users |
Financial accounting |
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Balance sheet, income stmt, stmt of cash flows, stmt of S/E |
Financial stmts |
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Provides financ info outside of financ stmts; examples- Prez ltr, annual rept, govt-filed repts, news releases, mgmt forecasts |
Financial reporting |
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Provide financ info about entity that’s useful to present and potential investors, lenders and creditors for decision-making; ID’s investors and creditors as primary users of gen-purp financ stmts |
Objective of financial reporting |
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Provide financ rept info to wide variety of users |
General-purpose financ stmts |
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Perspective that views company as separate and distinct from its owner |
Entity perspective |
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Approach that investors are interested in financ rept b/c it provides info used for decision-making |
Decision-usefulness approach |
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Acct that recognizes revenue when goods or service is provided |
Accrual-basis acct |
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Common set of standards and proced for accounting that is generally accepted and universally practiced; composed of mix of over 2,000 docs developed over last 70 years, inc APB Opinions, FASB stands, and bulletins |
GAAP |
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Set up by Federal govt to develop and standardize financial info presented to stockholders; require adherence to GAAP |
Securities and Exchange Commission |
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National prof org that helped develop GAAP; appointed CAP, APB, FASB |
American Institue of Cert Publ Acct (AICPA) |
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Committee of CPAs appointed to issue bulletins to deal with acct prob b/t 1939 and 1959 |
Committee on Acct Procedure (CAP) |
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51 bulletins dealing with acct problems b/t ‘39-‘59 |
Acct Research Bulletins (ARB) |
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Board created By AICPA in 1959 to advance written acct princ, determine appropr practices and narrow areas of inconsistency; Developed conceptual framework and research individ issues |
Acct Princip Board (APB) |
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Pronouncements intended to be based on research studies, reason and analysis |
APB Opinions |
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Group that examined the org and oper of APB to improve it |
Wheat Committee (Study group on Estabmt of Acct Princ) |
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Org to est and improve standards of financ acct and repting for guidance and educat of the public issuers, auditors and users |
Financ acct standards Board (FASB) |
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FASB pronouncmts that amend Acct Stands Codification |
Acct Standards Updates |
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Series of conceptual framework to develop long-range future stands of financ acct and reptng ; doesn’t establish GAAP |
Stmts of Financ Acct Concepts |
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Smaller group (7 from 18) Full-time, paid memb Greater autonomy (not part of anoth org) Independent (memb sever ties) Broad represent (no CPA prerequisite ) |
Diffs b/t APB and FASB |
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The AICPA board for auditing standards |
Auditing Stands Board |
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FASB update that provides implement guidance in framework of Codification to reduce diversity in practice on timely basis |
Emerging Issues Task Force (EITF) |
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modifications or ext issued by FASB to existing standards; considered authority for GAAP purposes |
Interpretations and FASB Staff Positions |
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System developed to provide one place for all authorit GAAP literature related to acct topics |
FASB Acct Stand Codification |
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on-line real-time database that provides easy access to Codification |
FASB Codification Research System (CRS) |
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Bill passed in response to group of Corp acct scandals, increasing resources for SEC to regulate and improve audit to bring change |
Sarbanes-Oxley Act |
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Estab PCAOB Stronger independ auditor/committee rules Require CEO, CFO certify financ stmts Require code of ethics for senior FOs Public companies required to attest to internal controls |
Key provisions of Sarbanes-Oxley Act |
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What the public thinks accountants should do and what accountants think they can do |
Expectation gap |
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Board with oversight and enforcmt auth; estab auditing, quality control and independ stands |
Public Company Acct Oversight Board (PCAOB) |
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Set of rules by IASB for international acct use; make existing financ rept stands fully compatible and coordinate future work for compatibility |
International Financial Reporting Standards (IFRS) |
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Board that estab internat stands to make compatible financ reports |
Internat Acct Stands Bd (IASB) |
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AICPA created CAP in 1939 51 ARBs on prob-by-prob basis |
AICPA created APB in 1959-1973 31 APB Opinions based on research and supported by reason and analysis |
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Wheat Committee (Study Group on Establmt of Acct Prin) appted in 1971 to avoid govt rules; replaced APB with FASB in 1973 |
FAF, FASB, FASAC FAF selects FASB and advis counc memb, oversees FASB activ, and funds both’s activ |
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FASB should : respond to need and view of whole econ community operate in full view of public thru due process
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Two premises for FASB est acct stands |
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ID topic Research topic- all chime in Public hearing Exposure draft- publ discors fb Bd eval fb and set stand |
5 steps for topic become GAAP standard |
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31 pronouncements intended to be based on research and analysis; b/t ‘59-‘73 |
APB Opinions |
