Accounting Research: Tools and Strategies, 7th Edition

CHAPTER 3

The Environment of Accounting Research

LEARNING OBJECTIVES

After completing this chapter, you should understand:

• The SEC's role and the complex environment for accounting.
• The FASB, which sets accounting standards for the private sector.
• The GASB, which sets accounting standards for state and local government accounting.
• Other organizations that influence the accounting standard-setting process.
• The types of authoritative pronouncements.
• The meaning and levels of GAAP.

THE ACCOUNTING ENVIRONMENT

Research on accounting issues is conducted in a dynamic environment. New professional standards are constantly issued, and existing standards are updated or deletd. In researching accounting issues, one needs to use the most recent authoritative pronouncements.

RESEARCH TIPS

Acquire a comprehensive understanding of the dynamic accounting environment to add depth of understanding to your research.

The development of accounting standards is influenced by a variety of factors, including:

1. The requirements of the federal government and other regulatory bodies.
2. The influence of various tax laws on the financial reporting process.
3. The practices of certain specialized industries, such as the motion picture and insurance industries.
4. Inconsistencies in practice.
5. Disagreements among accountants, business executives, and others as to the objectives of financial statements.
6. The influence of professional organizations.
7. International differences among countries in setting international ...