Joe$$ Choi, a history$$ major, is considering transferring to your school of business to study accounting. Joe is having some doubts because he is uncertain if there is any room for history in accounting.

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Part $1$

$($a$)$ When did financial reporting standard setting begin in the United$$ States?

Financial reporting standard setting began in the United States in

$$

$1934$ with the $1934$ Securities Exchange Act.

$1939$ by the Committee on Accounting Procedures $($CAP$).$

$1959$ by the Accounting Principles Board $($APB$).$

$1973$ by the Finanial Accounting Standards Boards $($FASB$).$

Part $2$

$($b$)$ Who had initial authority to set accounting$$ standards?

The

$$

Financial Accounting Standards Board $($FASB$)$

Internal Revenue Service $($IRS$)$

Securities and Exchange Commission $($SEC$)$

Senate

initially had the power to promulgate accounting standards that all$$ publicly$-$traded firms must follow.$$ However, this power was delegated to the

$$

Accounting Principles Board $($APB$).$

Financial Accounting Standards Board $($FASB$).$

private sector.

Part $3$

$($c$)$ Which organizations were delegated the authority to set$$ standards? Comment on the types of standards issued and concerns with the$$ standard$-$setting process under each organization.

The

$$

American Institute of Certified Public Accountants $($AICPA$)$

Committee on Accounting Procedures $($CAP$)$

Finanial Accounting Standards Board $($FASB$)$

was formed in $1939.$ The$$ organization's purpose was to

$$

increase

reduce

the number of accounting methods used in practice. During its$$ tenure, it produced $51$ standards, referred to as

$$

Accounting Research Bulletins $($ARBs$).$

Accounting Standards Updates $($ASUs$).$

Generally Accepted Accounting Principles $($GAAP$).$

International Financial Reporting Standards $($IFRS$).$

Opinions.

The organization accomplished its purpose and was replaced in $1959$ by the

$$

Accounting Principles Board $($APB$).$

American Institute of Certified Public Accountants $($AICPA$).$

Committee on Accounting Procedures $($CAP$).$

Part $4$

The$$ APB's purpose was to

$$

issue pronouncements on accounting standards needed to meet existing and emerging problems in financial reporting.

regulate accounting standards needed to meet existing and emerging problems in financial reporting.

The pronouncements of the APB were known as

$$

Accounting Research Bulletins $($ARBs$).$

Accounting Standards Updates $($ASUs$).$

Generally Accepted Accounting Principles $($GAAP$).$

International Financial Reporting Standards $($IFRS$).$

Opinions.

The APB was criticized for two reasons.$$ First, the board members were

$$

part$-$time, were CPAs and were still affiliated with their employers.

part$-$time, were not CPA's and were independent.

$$Second$,$ the board did not develop standards

$$

in anticipation of changes in the accounting environment.

that kept up with changing international markets.

that kept up with changing laws.

$$Rather$,$ the Board simply responded to long$$ existing, controversial accounting issues.

Part $5$

$($d$)$ Who currently sets accounting standards in the United$$ States? What is the structure of the$$ organization? What types of standards are$$ issued?

The

$$

Accounting Principles Board $($APB$)$

American Institute of Certified Public Accountants $($AICPA$)$

Financial Accounting Standards Board $($FASB$)$

currently sets accounting standards in the United States. All members are independent and are employed

$$

full$-$time

part$-$time

and

$$

do not have to

must

be accountants or CPAs. The members can join the board from

$$

government agencies and education.

government agencies and industry.

industry, education and public service.

The

$$

Emerging Issues Task Force

Financial Accounting Foundation

Financial Accounting Standards Advisory Council

Private Company Council

is responsible for the$$ oversight, administration and finances of the organization. The

$$

Emerging Issues Task Force

Financial Accounting Foundation

Financial Accounting Standards Advisory Council

Private Company Council

advises the organization on technical issues. The organization currently issues

$$

Accounting Research Bulletins $($ARBs$).$

Accounting Standards Updates $($ASUs$).$

Generally Accepted Accounting Principles $($GAAP$).$

International Financial Reporting Standards $($IFRS$).$

Opinions.

as part of the Accounting Standards Codification.

Financial reporting standard setting began in the United States inTheinitially had the power to promulgate accounting standards that all publicly$-$traded firms must follow.However, this power was delegated to theThewas formed in $1939.$The organization's purpose was tothe number of accounting methods used in practice.During its tenure, it produced $51$ standards, referred to asThe organization accomplished its purpose and was replaced in $1959$ by theThe organization accomplished its purpose and was replaced in $1959$ by theThe APB's purpose was toThe pronouncements of the APB were known asThe pronouncements of the APB were known asThe APB was criticized for two reasons.First, the board members we