Accounting Standards Well Defined By FASB

Those standards are officially recognized as authoritative by the Securities and Exchange Commission The mission of the FASB ASC is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports Broad participation, objectively considers all stakeholder views, and is subject to oversight by the Financial Accounting Foundation's Board of Trustees are the key areas to make note of, if such mission has to be achieved. For helping better organize the FASB ASC or the Accounting Standards Codification implemented a classification system. S The multiple formats has been released for accounting standards. While the U S Few good information regarding the implementation of the U.S GAAP standards will be required which are said to be the similar to the pre-codification process.

The FASAC is set to function on areas like advise the FASB on technical issues on the Board's agenda, possible new agenda items, project priorities, procedural matters that may require the attention of the FASB, and other matters as may be requested by the FASB or its chairman. At present, the Council has more than 30 members who represent a broad cross section of the FASB's constituency Broad participation, objectively considers all stakeholder views, and is subject to oversight by the Financial Accounting Foundation's Board of Trustees are the areas which seems to be the main focus of FASB and have set these as the main pathways for accomplishing its goal.

If the standards are properly set, a proper following of rules follow. It is the nature of the reporting issues and its scope which determines the nature and extent of board's specific research. The process followed by the FASB ASC in its operation activity includes the responsibilities of the Chairman, the composition of the FASB technical staff, the role of advisory groups including the Emerging Issues Task Force, and the role of public forums. Analyzing comment letters, public round table discussion and other information obtained through other activities are the few functions been taken care by the staff working in the process.

After carefully considering the stakeholder's input the board again delivers the provision proposed. Going forward, the FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force (EITF) Abstracts But, it will only be the accounting standards updates which will serve the complete purpose of updating codification, providing information and forming bases for conclusions.

http://goarticles.com/article/Accounting-Standards-Well-Defined-By-FASB/5180688/

Accounting Regulation & Investors

Unfortunately, if the past 15 years in the financial world have taught us anything at all, it is the people simply cannot be trusted when it comes to money. Greed will and usually does win out if left completely to our own devices. We saw it in the late 90s with the dot com bubble, companies springing up for IPOs (initial public offerings) when they had absolutely no product to sell. We saw it early last decade when multiple companies used faulty accounting to hide or reallocate debts, bumping up their bottom lines and artificially inflating profits and stock prices. We saw it again just a few years ago when the Great Recession hit. Brokerage firms completely overleveraged and hid toxic debt in A A A funds with the belief that good accounts would outweigh the defaults (wrong!). And these do not even include the massive Ponzi schemes (a common racket that is now almost a century old) that are revealed on almost a quarterly basis where investors lose everything.

In the wake of each of these events, the financial and accounting industries faced a great deal of public outrage. Each time the market took a hit (followed by 401Ks, portfolios, housing prices, and even the job market), tax payers demanded blood and the heads of those responsible on a platter. Beyond that, they also want assurances that such things cannot happen again. The latter is a difficult task to accomplish. The financial and accounting worlds are extremely complicated and difficult to regulate. This is not just because of the industries themselves, but also because every other industry in existence must operate in those realms.

A common problem is trying to account for each possible loophole (and greed will take advantage of these loopholes wherever they exist) while at the same time simplifying the overall markets - another item that investors continually want. Current accounting regulation is so complex and detailed that even experienced accountants struggle to understand all codes. The average voter will call to simplify it, not seeing the need for it to be so tedious. However, they tend to forget that the rules that were put in place were not done so because people like more laws. They were done so because somebody had abused that rule in the past and somebody else suffered for it. Simple blanket reform is a wonderful idea, but significantly tougher to implement across an entire system than often deemed.

That is not to say that we have not seen a great deal of regulation. The biggest, in the wake of the Enron/Arthur Andersen scandal, has been the Sarbanes-Oxley Act (commonly referred to as SOX). SOX did take some steps to standardize practices and improve transparency in areas where previous laws had been a bit vague. However, before seeing this as an overall solution, it should be noted that the events that led to the scandal were not legal. The accounting being used by Enron was already an illegal act. If a company is willing to behave illegally, then simply having more laws and reforms that they can ignore is not a solution to the problem.

This dire outlook means that it needs to be up to investors themselves to pay attention to their money and where they put it. They need to do their own research and pay attention not only to a stock's bottom line, but how it was obtained. If it looks a little fishy and like some numbers have been moved around, then that likely reflects a risk not taking.

http://goarticles.com/article/Accounting-Regulation-Investors/5182451/