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