(AICPA’s Role in Standards Setting) One of the major groups involved in the standards-setting process is the American Institute of Certified Public Accountants. Initially it was the primary organization that established accounting principles in the United States. Subsequently it relinquished most of its power to the FASB.

Instructions

(a) Identify the two committees of the AICPA that established accounting principles prior to the establishment of the FASB.

(b) Speculate as to why these two organizations failed. In your answer, identify steps the FASB has taken to avoid failure.

(c) What is the present role of the AICPA in the standards-setting environment?