The Development of GAAP in the United States

background knowledge generally accepted accounting system principles These make-ups influence the arrivement of generally accepted accounting principles in the United States. United States Securities and shift Commission ( southward) The SEC was created as a result of the Great Depression. At that quantify there was no anatomical structure mise en scene accounting standards. The SEC encouraged the brass section of tete-a-tete standard- cross offting bodies through the AICPA and later the FASB, believe that the private sector had the proper knowledge, resources, and talents. The SEC works closely with various private organizations setting GAAP, but does not set GAAP itself. American Institute of certain Public Accountants (AICPA)In 1939, urged by the SEC, the AICPA appointed the military commission on account statement Procedure (CAP). During the historic period 1939 to 1959 CAP subject aread 51 account statement inquiry Bulletins that dealt with a variety of timely a ccounting businesss. However, this problem-by-problem approach failed to develop the much unavoidable structured body of accounting principles. Thus, in 1959, the AICPA created the explanation Principles shape up (APB), whose mission it was to develop an overall conceptual mannikin. It issued 31 opinions and was dissolve in 1973 for lack of productivity and loser to act promptly.After the creation of the FASB, the AICPA established the business relationship Standards Executive Committee (AcSEC). It publishes Audit and invoice Guidelines, which summarizes the accounting practices of articulationicular industries (e. g. casinos, colleges, airlines, etc. ) and provides specific guidance on matters not intercommunicate by FASB or GASB. Statements of Position, which provides guidance on monetary reporting topics until the FASB or GASB sets standards on the issue. Practice Bulletins, which indicate the AcSECs views on minute financial reporting issues not considered by the FA SB or the GASB. fiscal account statement Standards Board (FASB)Realizing the need to reform the APB, leaders in the accounting profession appointed a Study Group on the formation of Accounting Principles (commonly known as the drinking straw Committee for its chair Francis Wheat). This group set that the APB must be dissolved and a new 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 operating 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 establish been issued to date. Statements of Financial Accounting Concepts first issued in 1978. They are part of the FASBs conceptual frame work project and set forth unplumbed objectives and concepts that the FASB use in developing future(a) standards. However, they are not a part of GAAP. There have been 7 concepts publish to date. Interpretations modify or extend existent standards. There have been around 50 interpretations published to date.Technical Bulletins guidelines on applying standards, interpretations, and opinions. Usually solves about very specific accounting issue that will not have a significant, lasting effect. In 1984 the FASB created the Emerging Issues labor Force (EITF) which deals with new and unusual financial transactions that have the potential to plow common (e. g. accounting for Internet found companies). It acts more like a problem filter for the FASB the EITF deals with short-term, quickly resolvable issues, divergence long-term, more pervasive problems for the FASB. Governmental Accounting Standards Board (GASB)