Q NO.03: Discuss the role of each of the following in the Formation of Accounting Principles?
* AICPA: American Institute of Certified Public Accountant:
The American Institute of Certified Public Accountants (AICPA) is the national professional organization for Certified Public Accountants (CPAs) in the United States. Founded in 1887, the American Institute of Certified Public Accountants (AICPA) is the national professional organization of Certified Public Accountants (CPAs) in the United States, with more than 394,000 members in 128 countries in business and industry, public practice, government, education, student affiliates and ...view middle of the document...
Role of American Institute Of Certified Public Accountants - 'AICPA'
The AICPA sets standards and rules that all members and other practicing CPAs must follow. This authority extends to the following areas:
1. Auditing Standards
2. Compilation and Review Standards
3. Other Attestation Standards
4. Consulting Standards
5. Code of Professional Conduct
1. Auditing Standards:
* The Auditing Standards Board (ASB) is responsible for issuing pronouncements on auditing matters for all entities other than publicly traded companies.
* The pronouncements are known as Statements on Auditing Standards (SASs)
2. Compilation and Review Standards:
* The Accounting and Review Services Committee is responsible for issuing pronouncements of the CPAs responsibilities when the CPA is associated with financial statements of non-public companies that are not audited.
* The Statements on Standards for Accounting and Review Services (SSARS) provide guidance for providing compilation (no assurance on financials) and review services (limited assurance on financials).
3. Other Attestation Services:
* Forms of attestation are often performed for other than historical financial statements.
* Examples of other attestation services involve prospective financial information in forecasts and projections.
4. Consulting Standards:
* The Management Consulting Services Executive Committee is responsible for issuing pronouncements on consulting services.
* Consulting differs from attestation in that the CPA does not report on another party’s assertion. Rather, the CPA develops findings, conclusions, and recommendations.
5. Code of Professional Conduct:
* The AICPA Committee on Professional Ethics sets rules of conduct that CPAs are required to meet.
Role of the AICPA’s Business, Industry & Government Team?
The AICPA’s Business, Industry & Government (BIG) team promotes the role of CPAs in business, industry and government, highlighting their value as innovative and ethical leaders who are:
(1) Essential knowledge resources,
(2) Recognized business partners and
(3) Strategic decision makers.
The team provides practical guidance, information and tools related to traditional functional areas (financial accounting, reporting, governance, tax and internal auditing) and growing areas of CPA expertise such as management of processes, technology and resources.
Role of AICPA Tax Team?
The AICPA’s Tax Team provides guidance, information, and practice tools to the tax practitioner. It also works to improve the tax system for CPAs and the public, with a major theme of tax simplification. In addition, it represents the AICPA members’ tax interests. The team publishes non-partisan studies to help legislators and other interested parties understand the tax implications of legislation.
* FASB: Financial Accounting Standard Board:
The Financial Accounting...