ACC541 ACC/541 DQs Week 1 - 19456

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1. What is the importance of the mission of the FASB?
2. When (if) the SEC votes to adopt IFRS (June 2011 vote moved to 2012) does FASB have a future? Why or Why not?
3. What is the Convergence Project vs the Condorsement? Will the U.S. benefit from the Condorsement or was it a bad decision? Why or why not?
The FASB ASC is now the sole authoritative source for all U.S. GAAP.
a. What are the major goals of the FASB ASC?
b. How is the FASB ASC expected to improve the practice of accounting?
c. What literature is now contained in the FASB ASC?
d. What should an accountant do if the guidance for a particular transaction or
event is not specified within the FASB ASC?
At the completion of the Darby Department Store audit, the president asks about the meaning of the phrase “in conformity with generally accepted accounting principles,” which appears in your audit report on the management’s financial statements. He observes that the meaning of the phrase must include more than what he thinks of as “principles.”
a. Explain the meaning of the term accounting principles as used in the audit report (Do not discuss the significance of “generally accepted”).
b. The president wants to know how you determine whether or not an accounting principle is generally accepted. Discuss the sources of evidence for determining whether an accounting principle has substantial authoritative support.
c. The president believes that diversity in accounting practice will always exist among independent entities despite continual improvements in comparability. Discuss the arguments that support his belief.
The International Accounting Standards Committee’s Framework for the Preparation of Financial Statements identifies four primary qualitative characteristics.
a. Discuss the four qualitative characteristics identified by the IASB.
b. Contrast and compare these qualitative characteristics with the qualitative characteristics identified by the new SFAC 8 (replaces SFAC 1 & 2). The new SFAC 8 came out after the book was published.

Solution Description

1.  What is the importance of the mission of the FASB?