Question

Standard Setters and Committees – For each organization, please describe their purpose, structure, and role in the accounting world.

a. Financial Accounting Standards Board (FASB)

b. International Accounting Standards Board (IASB)

c. Securities Exchange Commission (SEC)

d. Emerging Issues Task Force (EITF)

e. American Institute of Certified Public Accountants (AICPA)

f. Public Company Accounting Oversight Board (PCAOB)

Answer 1

a. Financial Accounting Standard Board (FASB)

1) PURPOSE : - Financial Accounting Standard Board is a private, non-profit organisation standard setting body whose primary purpose is to improve and establish Generally Accepted Accounting Principles (GAAP) for the public interest in United States. FASB are the body who set principles for the public company in US.

2) STRUCTURE : - FASB is based in Connecticut and Norwalk and is functioned by seven full time board members. One of which is the chair man appointed by Financial Accounting Foundation to serve 5 years term and can be reappointed for one term only.

3) Role : - The role of FASB is to provide more information for the stakeholders to make investment decisions. The standards of FASB are designed for more transparency in the financial statements. FASB allows company to decide how to depreciate their assets.

b. International Accounting Standard Board (IASB)

1) PURPOSE : - The primary purpose of the IASB is to review and makes development in the IFRS's existing and new. The framework is to assist to make financial statements in developing accounting policies.

2) STRUCTURE : - The IASB is an independent organisation with two main bodies, the Trustees and the IASB as well as Standard Advisory Council and International Financial Reporting Interpretations Committee.

3) Role : - The IASB have a responsibility and authority to issue international accounting standards. The IASB make many standards.

c. Securities Exchange Commission (SEC)

1) PURPOSE : - The purpose of the SEC is to protect the investors from illegal financial practices or fraud by requiring full financial disclosure by company.

2) STRUCTURE : - The SEC comprises of Five Commissioner. They are appointed by the President of the United States with the consent of the United States Senate.

3) ROLE : - The role of the SEC is to protect the interests of the investors, to maintain efficient market and to assets companies in raising capital.

d. Emerging Issues Task Force (EITF)

1) PURPOSE : - The main purpose is to minimize the need for Financial Accounting Standard Board, to spend time and effort addressing narrow implementation or other issue that can be analysed within the Generally Accepted Accounting Principles.

2) STRUCTURE : - The EITF consists of minimum 10 members and maximum 15 members. Including the chairman, a non voting appointment of the FASB Chairman.

3) ROLE : - The role of the Emerging Issues Task Force is solve the emerging issues and resolve them with a uniform set of practices.

e. American Institute Of Certified Public Accountants (AICPA)

1) PURPOSE : - The purpose of the AICPA is to set ethical standards for the profession and the U.S auditing standards for private companies, non-profit organisation, federal, state and local government.

2) STRUCTURE : - The AICPA is the world's largest member association representing the accounting profession with more than 431,000 members.

3) ROLE : - The role of the AICPA is to set ethical standards for the accounting profession. It develops and grades the Uniform CPA Examination.

f. Public Company Accounting Oversight Board (PCAOB)

1) PURPOSE : - The main purpose of the PCAOB is to overview the audits of the public companies and other issues in order to protect the interest of the investors.

2) STRUCTURE : - There are five members of the board, including the chairman are appointed for 5 years term.

3) ROLE : - The role of the PCAOB is to overview the auditors of the public company to protect the interests of the public in preparation of informative, accurate and independent audit report.