Finance

Accounting Principles-GAAP

(Institution)

(Date)

(Supervisor)

Abstract

This paper will focus ABT Associates Inc, a for profit organization that deals with consultations to a variety of issues in economic and social policy, business consultation and research, registries and trials. The company also conducts economic analysis, cost benefit analysis, evaluation and monitoring, market research, information and communications, clinical trials, performance measurement, new product development, program analysis, policy analysis, technical analysis, and statistical analysis ( Australian Society of Accountants, 2011). The will evaluate Generally Accepted Accounting Principle as an accounting principle that impacts ABT Associates Inc using the company’s financial statements (FY 2011-FY2012) and the loopholes in it that allowed environmental accounting activities parallel to irregularities that led to a massive fraud attributed to the company in the past four years. In addition, the paper will use the attempts made by Securities and Exchange Commission, the American Institute of Certified Public Accountants, the US Congress. The Financial Accounting Standards Board to address the shortcomings of GAAP at the company. The paper also illustrates why these bodies failed to close significant environmental accounting shortcomings. The paper will however close with recommendations that show how Security and Exchange Commission could narrow the bridge in corporate environmental disclosures reflecting on the new standards released by American Society for Testing and Materials (Poethig, 2011).

Introduction

In relation to accounting principles, Generally Accepted Accounting Principle (GAAP) governs all corporate financial reports for instance in our scenario, environmental costs and liabilities. The rules and principles are contained in statements and guidelines of position normally issued by firms including...