FOR KIM WOODS ONLY
• Case 1-1 Sources of GAAPThe FASB ASC is now the sole authoritative source for all U.S. GAAP.Required:a.What are the major goals of the FASB ASC?b.How is the FASB ASC expected to improve the practice of accounting?c.What literature is now contained in the FASB ASC?d.What should an accountant do if the guidance for a particular transaction or event is not specified within the FASB ASC?
• Case 1-3 Politicalization of Accounting StandardsSome accountants have said that politicalization in the development and acceptance of generally accepted accounting principles (i.e., standard setting) is taking place. Some use the term politicalization in a narrow sense to mean the influence by government agencies, particularly the SEC, on the development of generally accepted accounting principles. Others use it more broadly to mean the compromising that takes place in bodies responsible for developing these principles because of the influence and pressure of interested groups (SEC, American Accounting Association, businesses through their various organizations, Institute of Management Accountants, financial analysts, bankers, lawyers, etc.).Required:a.The Committee on Accounting Procedure of the AICPA was established in the mid to late 1930s and functioned until 1959, at which time the Accounting Principles Board came into existence. In 1973, the Financial Accounting Standards Board was formed, and the APB went out of existence. Do the reasons these groups were formed, their methods of operation while in existence, and the reasons for the demise of the first two indicate an increasing politicalization (as the term is used in the broad sense) of accounting standard setting? Explain your answer by indicating how the CAP, APB, and FASB operated or operate. Cite specific developments that tend to support your answer.b.What arguments can be raised to support the politicalization of accounting standard setting?c.What arguments can be raised against the politicalization of accounting standard setting? (CMA adapted)
• Case 2-2 The Theoretical Foundation of Accounting PrinciplesDuring the past several years, the FASB has attempted to strengthen the theoretical foundation for the development of accounting principles. Two of the most important results of this attempt are the Conceptual Framework Project and the Emerging Issues Task Force. During this same period, the FASB has been criticized for imposing too many standards on the financial reporting process, the standards-overload problem.Required:a.Discuss the goals and objectives of i. The Conceptual Framework Project ii. The Emerging Issues Task Forceb.Discuss the standards overload problem.