Accounting Standards Boards

Accounting Standards Boards Paper

Na’Kisha Sherrard

ACC/541 Accounting Theory and Research

University of Phoenix

Professor Donald Schroedle

December 9, 2008

Accounting Standards Boards

This paper will outline the history of the relationship between Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), the IASB equivalents for the FASB original pronouncements, and how the MSA program prepares the student for a professional life within the accounting vocation.

Accounting standards are required so that financial statements will honestly and dependably illustrate financial performance. With the lack of standards, users of financial statements would need to be taught the accounting regulations of each organization, and comparisons between organizations would be complicated. Accounting standards are important in a successful market, as information must be evident, trustworthy, and reasonable. In 1972 it was suggested that the Accounting Principles Board (APB) be eradicated and Financial Accounting Standards Board (FASB) be formed. “The AICPA quickly adopted the Wheat Committee recommendations, and the FASB became the official body charged with issuing accounting standards” (Schroeder, Clark, & Cathey, 2005, p.10). The FASB agrees to enhance an organization accounting procedures by improving rules set out for accounting information. Schroeder, Clark, & Cathey (2005) identify the goals that FASB will attempt to achieve:

Improve the usefulness of financial reporting by focusing on the primary characteristics of relevance and reliability and on the qualities of comparability and consistency. Keep standards current to reflect changes in methods of doing business and changes in the economic environment. Consider promptly any significant areas of deficiency in financial reporting that might be improved through the standard-setting process. Promote the international comparability of accounting...