accounting case project.

Compare FASB and IASB Standard Setting Background The quality of financial information companies provide is vital to the confidence of investors in making capital allocation decisions. In the United States, the Securities and Exchange Commission has legal responsibility for setting accounting standards for reports of publicly traded companies but they currently rely on the Financial Accounting Standards Board (FASB) to develop those standards. The FASB has been working closely with the International Accounting Standards Board (IASB) to raise the quality of financial reporting standards in both the U.S. and around the world. As the move to converge U.S. standards with international standards continues, the oversight, control, independence, funding, transparency, and participation in the standard setting process become critical issues in the discussion of the efficacy of standards setting. In the past few months, the SEC staff has explored and written about a possible \"endorsement\" approach for incorporating IFRS into the U.S. financial reporting system; a transitional approach to standard setting involving the FASB endorsing IASB standards during a period of convergence. Quoting James L. Kroeker, Chief Accountant at the SEC, in a speech to the American Accounting Association in August 2009, (www.sec.govews/speech/2009/spch120709jlk.htm) \"Perhaps as important as the resulting accounting standards is the process by which those standards are developed. Accounting standards must be established through an independent (in both fact and appearance) and transparent process one in which the standard setter seeks and considers input from all constituents openly, but also one in which the standard setter is then allowed to independently exercise its expert judgment.\" Your Role Assume that you are an intern for a large U.S. public accounting firm with international offices, we'll call it PEDK. You report directly to Ms. Brightness, a PEDK partner who has many Fortune 300 companies as clients. Ms. Brightness wants to understand how the PROCESS of standard setting under IASB differs from current U.S. standard setting under FASB. She also wants to know more about the implications of standard setting by the IASB versus the current standard setting by FASB. Specifically, she has asked you do some research and find answers to the following questions: 1. Ms. Brightness does not understand how the process of standard setting under IASB compares with the current U.S. standard setting under FASB. a. What are two of the most significant similarities between IASB and FASB standard setting for US firms and accounting firms in general? Describe at least two significant similarities. b. What are two of the most significant differences between IASB and FASB standard setting process? Describe at least two significant differences. c. What would be the SEC role under an \"endorsement\" approach? Describe the role of the SEC under an \"endorsement\" approach. 2. Based on your research, what approach to standard setting would you encourage Ms. Brightness to support? Be sure to consider her perspective as a partner in a CPA firm and her role as an advisor to a Fortune 300 company. Provide support for your recommendations and opinions (e.g., why you think the FASB approach is better or worse than the IASB approach, or which features of either should be incorporated into a hybrid approach, or is the \"endorsement\" approach a good compromise). Required You are to research answers to Ms. Brightness's questions using one or more outside references. Respond to the questions in a memo and be sure to cite resources used to support your answers. An excellent reference paper may be found at http://papers.ssrn.com/sol3/papers.cfm? abstract_id=1310290. Another key reference is a SEC staff paper available at http://www.sec.gov/spotlight/globalaccountingstandards/globalaccountingstandards.pdf References to the textbook should be presented in the following format: (Kieso, et al., page numbers). All other references should be formatted as follows: (Source, date). For example, (Virginia Law & Business Review, Fall 2008). Memorandum Writing Guidelines A memorandum (memo) is a document in which you answer, in a clear, focused, and organized fashion, a question you've researched for a boss, client, co-worker(s), or all of the above. Your memowriting should be direct and your document pleasing to the eye. In a memo, you digest and explain difficult material for your reader, not just tell your reader what you researched. You analyze key points and include only the most important material on a given topic. This course asks you to consider several sources when writing your memo. You should read each of these sources at least twice before writing your memo and once after, to make sure you've done what you are supposed to do. You should consult them in this order: 1. The memo assignment given to you by your instructor 2. These writing guidelines 3. If this is the second memo, the writing graders' comments on your first draft 4. The sample memo(s), if your instructor has handed one out. A note of caution: whenever sample memos are handed out, a handful of students neglect the Writing Guidelines and the writing graders' comments and use the sample memo as a template. This is dangerous, because no memo is perfect. Use your judgment, and prioritize #1-3 above. I. MEMO CONTENT A. Organization: Get to the Point and Be Clear Introduction: Begin with an introduction. This is a short, concise paragraph at the beginning of the document in which you tell your readers, right at the start: the main point/purpose of your document any issues that are at stake your conclusion/recommendation Your reader wants to know your main points up front. State your conclusion explicitly and clearly in your introduction. Do not write abstracts statements such as "At the end of this document, I will tell you what I found through my research." Body of Memo: Organize your content into short sections of related information. Begin each section with its main point, and follow up with detailed explanation. Some tips to help you: Use concise paragraphs. Avoid lengthy sentences and unnecessary words or sentences that do not add to or directly support your argument. Each paragraph should make a point distinct from the previous and next ones. However, you can have more than one paragraph centered on a particular theme, as long as they have slightly different topics and sub-headings. Have a topic sentence in each paragraph that states the paragraph's main point. Transition neatly from paragraph to paragraph with transitional sentences. Conclusion/Recommendation: Your document must end with a conclusion. Depending on the assignment, this conclusion will either take the form of a "Recommendation" or it will be a conclusion to your argument. If your conclusion is a recommendation, you must explain, in detail, why you have taken your position. If your conclusion wraps up your argument presented in the memo, do not restate exactly your argument presented in the body of the memo but revisit it in a new way. Consider: A conclusion is not a place for new information, such as statistics you haven't mentioned, an argument you haven't made yet, etc. A conclusion also isn't a place to repeat things you've already said. This is a space in which you can revisit points you've made in a new way. Be concise and clear. B. Analysis, Logic, and Explanation: Do the Analytical Work for Your Reader It is your job to explain the material to your reader. Keep in mind that in these Accounting assignments, your reader is generally someone in the business world who is not familiar with accounting. Some rules to follow: Explain any terms/concepts that are used solely in the business world and define them when you first use them. Explain your logic! i.e., how you reasoned your way to your conclusion. Quote only when necessary. Introduce quotations by explaining their significance to your memo and argument, and follow them with your explanation/interpretation. Paraphrase long quotes in your own wordsthis shows that you understand how to communicate accounting problems to a layperson, which is at the core of these assignments. C. Style: Be Concise and Avoid Unnecessary Repetition/Redundancies Use the active voice. Avoid lengthy sentences, and break your writing into short sections. Use simple language and write in a natural style that avoids overly complex sentence structure and jargon. Delete words, sentences, and phrases that do not add to your argument. Do not talk about the memo in the memo (i.e.,\"This memo will explain...\"). D. Tone: Writing Appropriate and Clear Prose When you write a memo, you are not writing to a friend and you are often writing to a boss or a superior. Your diction and tone should be appropriately formal yet readable. Examples to avoid: Too casual: "I'm really glad you gave me the chance to write this memo, and I hope that you enjoy reading it, as I enjoyed writing it." Too arrogant or condescending: "After doing my research, I have become an expert on this subject; therefore, you should listen to me and do what I advise." OR \"If you would like a better explanation of these data, you should consult X source yourself.\" Too much like a letter: \"Dear Mr. Smith, I think you will see that the rate will decline over time.\" Too much information about the research process, not enough about the solution to the problem: \"In order to research your question, I spent a great deal of time examining the FASB codification, especially codes X, Y and Z.\" II. MEMO FORMAT A. Layout: Add Visual Impact, but Keep Things Simple A memo that appears open and straightforward probably has a good layout; a memo that appears cluttered and confusing probably does not. Do not blow up headings, sub-headings, and the like. Remember: A memo is not an essay, outline or letter, and it looks quite different. Headings: You must use headings and sub-headings in your memo. Your reader is a busy executive who might scan your document for important info which can be accessed in the headings and subheadings. They also help to direct your reader, leading him or her through the important parts of your memo. Bullets and Lists: Not all material is meant to be listed; use bullets and lists sparingly, where the material demands it. Do not rely on bullets and lists to convey information to your reader. B. Spacing and Indentation: Double space and Indent Spacing: For the purposes of these memo-writing exercises, double-space your memo unless the assignment explicitly states otherwise. (Double spacing gives writing graders space for comments. In the business world, memos are often single-spaced.) Indentation: Indent the first lines of paragraphs. Do not add a space between paragraphs in the same section; but do add a space between sections. An alternate style is not to indent and to create paragraphs that are flush with each other. If you do this, you must add one space between both paragraphs and sections. Do not allow your formatting to look crowded. C. Final Formatting Details Font and Margins: Use 12-point Times New Roman or Times font. Use 1.5-inch margins on all sides. Staple your memo! Memo Heading: Don't forget to observe the memo format. In the upper left-hand corner of the memo, indicate the following, in single-spaced lines: To: From: Subject: Date: Page Numbers: In Microsoft Word, insert page numbers, either in the top-right or bottom-center of the page. Acronyms: The first time you use a title that can be turned into an acronym, such as Financial Accounting Standards Board (FASB), you must always write it out and put the acronym in parentheses, as we do here. After this, use the acronym. There is one exception: acronyms cannot begin sentences