ACT 4435 TU The FASB Accounting Standards Codification Discussion

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Business Finance

act 4435

Troy University


Question Description

Need help with my Accounting question - I’m studying for my class.

Please answer the question completely and clearly, and just be careful not to plagiarize. Thank you for your help.

1. Internal controls perform three important functions- describe those functions.

2. What is codification? Describe its purpose.

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Codification The FASB Accounting Standards Codification is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. The Codification is effective for interim and annual periods ending after September 15, 2009. The FASB Accounting Standards Codification (ASC or the "Codification") organizes nongovernmental U.S. GAAP using a topic-based model consisting of 90 individual Topics. Each Topic contains at least one Subtopic. Subtopics contain Sections, which include the actual accounting guidance. Sections are based on the nature of the content (e.g., scope, recognition, measurement, etc.) and are standardized throughout the Codification. Topics, Subtopics, and Sections Each Section includes numbered Paragraphs. Paragraph numbers start with the Section number followed by the unique paragraph number. For example, in Section 55 the first paragraph is numbered 55-1. Paragraph numbers in the Codification will not change going forward. New paragraphs may result in the FASB using a letter extension to keep the numbering constant. For example, a new paragraph inserted between paragraphs 55-3 and 554 would be numbered 55-3A. 38 The Codification is updated via Accounting Standards Updates (ASUs). These are assigned a number that corresponds to the year of the ASU’s issuance and its sequential order (e.g., the first ASU issued in 2010 was 2010-01). ASUs replace accounting changes that historically were issued as FASB Statements, FASB Interpretations, FASB Staff Positions, or other types of FASB standards. ASUs contain a background and basis for conclusions as well as a marked draft of any changes to existing guidance. The new guidance is labeled “Pending Content” in the Codification, and the superseded guidance will not be removed until the guidance in the ASU is effective for all entities. ASUs are available in PDF format on the FASB website.
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Explanation & Answer

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Running head: ACCOUNTING



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Internal controls are the rules, procedures, and mechanisms that a company implements
to ensure its accounting and financial information has high integrity, prevent fraud, and promote
accountability. The types of control are preventive and detective. Preventive controls aim at
deterring the occurrence of fraud or errors within the financial system of an organization. This is
affected ...

WhqlX (14045)
New York University

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