Download Which groups impact the U.S. Accounting rules?

GROUPS THAT IMPACT
ACCOUNTING RULES
Major players, minor players in US GAAP
• Main Purpose -- Protect investors, run securities market (NYSE,
NASDAQ), facilitate capital raising
• Legal authority ---to develop accounting rules ,practices for
publically traded US corporations
• Mandated financial statements --based on professional
standards & audited, based on US GAAP
• Private sector versus public sector –FASB in US, IASB for
international
• Enforce rules - Substantial authoritative support for FASB,
require audits in compliance with US GAAP
• Input -persuasion rather than edict
• Feedback -- proposed standards
Major player - The
Securities and
Exchange
Commission
(SEC)
The public sector group
with legal authority in the
US to make accounting
rules, but more important
in that they enforce the
rules
• Rule makers - FASB 1973 to present (APB 1959-1972, CAP
1938-1958)
• Membership - 7 well paid (funded by FAF), highly educated,
intelligent, experienced, ethical, full-time, diverse members
• Rule making process – ID issues, research, issuing invitation to
comment, exposure draft, accounting standard, public input,
4 of 7 pass standard (twice in history 5 of 7)
• Lots of support – Financial Accounting Standards Advisory
Council(FASAC), Emerging Issues task force (EITF),
research/technical & administrative staff
• Accounting Standards Codification (2009) searchable
electronic database all US GAAP– 90+ topics (includes 168
FASB standards)
• Accounting Standards Updates replaces statements of financial
accounting standards, interpretations, staff positions, technical bulletins,
statements of financial accounting concepts, guide for implementation
Major Player
-- Financial
Accounting
Standards
Board (FASB)
Private sector rule-making
body that SEC usually
supports
• Impacts -- 120+ countries, ruling flexibility, applied differently by country
• Pronouncements - International Financial Reporting Standards (IFRS) from
IASB, International Financial Reporting Standards Interpretive Guidance (IFRICs) from IFRS
Interpretations Committee
• Standard process – topic, discussion paper, exposure draft, public input,
proposed standard
• Voting -- 10 of 16 members, members from various countries
• Financial support -- IFRS foundation over IASB similar to FAF over FASB
• Rulings -- IFRS Foundation web site
• Joint projects - with FASB to develop common standards
• Older rulings – 41 International Accounting Standards (IASs)
Major Player –
International
Accounting
Standards
Board (IASB)
Global standard setter
•FASB seeks public input in its
standard setting process
Minor Players
• American Institute of Certified Public Accountants ( AICPA )
• American Accounting Association (AAA)
• Institute of Management Accountants (IMA)
Various accounting
groups seek input to the
standard setting process
Convergence of FASB and IASB
Accounting Standards
• Initial SEC time line –bilingual for now, IFRS in 2015-16, global standards
• Impact on US of IFRS – good for investors, international companies, negative for--US
contracts, less guidance, some radically different, small company/US only company
impact, expense, governance- interpret, apply, enforce
• SEC update in 2012– no timeline, convergence by FASB/IASB joint projects
• joint projects start in 2002 -- conceptual framework completed, Revenue recognition
issued in 2014, exposure draft -- leases, insurance, working on financial instruments