Chapter 14 Assignment 2
Assignment 2 – Accounting Principles and Reporting Standards – Chapter 14: Discussion Questions
Wilmary Colon Rivera
California College San Diego
January 10, 2015
ACC213
Nellie Hornbeck
Assignment 2 – Accounting Principles and Reporting Standards – Chapter 14: Discussion Questions.
1. In the U.S accounting principles are developed through a cooperative effort between the private sector (business) and the public sector (government).
Public sector ---- Government ---- Represented by SEC
SEC – Securities and Exchange Commission:
Regulates all publicly held companies and all companies with more than a specified number of shareholders or owners.
Determines the form and content of accounting reports filed by companies under its jurisdiction.
Has the authority to define terms and prescribe accounting principles and standards.
Let the accounting profession develop principles and standards but has the final authority.
Private Sector ---- Business ---- Represented by the FASB
Has the authorative rule making body for the private sector.
Seven member board – each having distinguished accounting backgrounds who are full time employees.
Responsible for developing Financial Accounting Standards and Principles.
Develops and issues Statements of Financial Accounting Standards
Has issued about 160 financial standards that SEC recognizes as authorative.
2. It is desirable to have a set of fundamental concepts to be used in developing accounting standards and rules because it will provide the accounting community guiding the FASB in establishing accounting standards on a consistent basis. It will also help determining bounds for judgement in preparing financial statements by prescribing the nature functions and limits of financial accounting and reporting. It also inceses the users’ understanding of and the confidence of financial reporting.
3. U.S. companies be affected by the IFRS - International Financial Reporting Standards has been affecting US companies for some time -
Wilmary Colon Rivera
California College San Diego
January 10, 2015
ACC213
Nellie Hornbeck
Assignment 2 – Accounting Principles and Reporting Standards – Chapter 14: Discussion Questions.
1. In the U.S accounting principles are developed through a cooperative effort between the private sector (business) and the public sector (government).
Public sector ---- Government ---- Represented by SEC
SEC – Securities and Exchange Commission:
Regulates all publicly held companies and all companies with more than a specified number of shareholders or owners.
Determines the form and content of accounting reports filed by companies under its jurisdiction.
Has the authority to define terms and prescribe accounting principles and standards.
Let the accounting profession develop principles and standards but has the final authority.
Private Sector ---- Business ---- Represented by the FASB
Has the authorative rule making body for the private sector.
Seven member board – each having distinguished accounting backgrounds who are full time employees.
Responsible for developing Financial Accounting Standards and Principles.
Develops and issues Statements of Financial Accounting Standards
Has issued about 160 financial standards that SEC recognizes as authorative.
2. It is desirable to have a set of fundamental concepts to be used in developing accounting standards and rules because it will provide the accounting community guiding the FASB in establishing accounting standards on a consistent basis. It will also help determining bounds for judgement in preparing financial statements by prescribing the nature functions and limits of financial accounting and reporting. It also inceses the users’ understanding of and the confidence of financial reporting.
3. U.S. companies be affected by the IFRS - International Financial Reporting Standards has been affecting US companies for some time -
References: Price, J., Haddock, M., & Farina, M. (20012). Accruals, Deferrals and the Worksheet. In <i>College accounting: Chapters 1-30</i> (13th ed.). Boston: McGraw-Hill/Irwin.