What issues do you see with the current standard-setting process for Generally Accepted Accounting Principles (GAAP)? Assuming you have complete authority in the matter, how would you propose GAAP be developed and enforced? How would your answer be different if the standards in question are the International Accounting Standards Board (IASB)’s Conceptual Framework?
Thank you for the opportunity to help you with your question!
The fact that companies use the
same model is important to financial statement users. Investors and creditors
use financial information to make their resource allocation decisions. It’s
critical that they be able to compare
financial information among companies. To facilitate these comparisons,
financial accounting employs a body of standards known as generally accepted
accounting principles, of-ten abbreviated as GAAP (and pronounced gap). GAAP are a dynamic set of both
broad and specific guidelines that companies should follow when measuring and
reporting the information in their financial statements and related notes. The
more important broad principles or standards are discussed in a subsequent
section of this chapter and revisited throughout the text in the context of
accounting applications for which they provide conceptual support.
More specific standards, such as how to
measure and report a lease transaction, receive more focused attention in
Please let me know if you need any clarification. I'm always happy to answer your questions.
Aug 3rd, 2015
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