C213- Chapter 1

Financial Accounting Standards Board (FASB)

A private body established and supported by the joint efforts of the U.S. business community, financial analysts, and practicing accountants. The FASB has no legal power to enforce the accounting standards it sets but maintains its influence by carefully protecting its prestige and reputation.

Which organization or entity is charged with developing worldwide accounting practices?

The International Accounting Standards Board or the IASB is charged with developing worldwide accounting practices.

Who has the legal authority to set accounting standards?

The International Financial Reporting Standards or the IFRS has the legal authority to set accounting standards.

Who is the current standard-setting board for accounting in the private sector?

The current standard setting board for accounting in the private sector is Financial Accounting Standards Board or the FASB.

Who are the nine primary users of financial accounting information?

The nine primary users of financial accounting information are: Lenders, investors, managers, suppliers, customers, employees, competitors, government agencies and politicians.

What are the three primary financial statements?

The three primary financial statements are the balance sheet, income statement and statement of cash flows.

What is the purpose of each primary financial statement?

What is the purpose of each primary financial statement? The purpose of the balance sheet is to report the assets and liabilities of a company. The purpose of the income statement is to report the amount of net income earned by a company during a specific time period. The purpose of the statement of cash flows is to report the amount of cash collected and paid by a company in the investing, operating and financing activities of the company.

International Financial Reporting Standards (IFRS)

a set of standards used and created by the International Accounting Standards Board.

Generally Accepted Accounting Principles (GAAP)

accounting rules and standards used for financial reporting

International Accounting Standards Board (IASB)

an independent international body who creates worldwide accounting standards.

Public Company Accounting Oversight Board (PCAOB)

five members chosen by the Sarbanes Oxley Act to oversee the accounting and auditing profession.

Internal Revenue Service (IRS)

the government agency responsible for tax collection and tax law enforcement.

SEC The Securities and Exchange Commission (SEC)

the government body responsible for regulating the financial reporting practices of publicly owned corporations with the buying and selling of stocks and bonds.

American Institute of Certified Public Accountants (AICPA)

the professional organizations of certified public accountants in the United States.