Many different parties rely on government financial statements, including constituents and lawmakers.Fairness and transparency are a priority of the GASB, and their own processes and communications are available for public review.
Many different parties rely on government financial statements, including constituents and lawmakers.Fairness and transparency are a priority of the GASB, and their own processes and communications are available for public review.Tags: Mckinsey Problem Solving ApproachOrganizing Research PapersTotal Quality Management Research PaperStellar Nucleosynthesis R-ProcessWho Wrote The Book - Four Essays On LibertyAqa A2 P.E CourseworkLaw School Application Essay
Beyond the 10 principles, GAAP compliance is built on three rules that eliminate misleading accounting and financial reporting practices.
These rules create consistent accounting and reporting standards, which provide prospective and existing investors with reliable methods of evaluating an organization's financial standing.
In response, the federal government, along with professional accounting groups, set out to create standards for the ethical and accurate reporting of financial information.
According to Stephen Zeff in The CPA Journal, GAAP terminology was first used in 1936 by the American Institute of Accountants (AIA).
Financial Accounting Foundation (FAF) – This organization was formed in 1972 as the administrative corporation that oversees the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) .
The FAF is responsible for appointing board members and ensuring that these boards operate in a fair and transparent manner.
Oftentimes, GAAP seems to take a "one-size-fits-all" approach to financial reporting, however this can do little to reduce issues faced by distinct industries.
For example, state and local governments have struggled with implementing GAAP due to their unique environments.
Without these rules, accountants could use misleading methods to paint a deceptive picture of a company or organization's financial standing.
Without regulatory standards, companies would be free to present financial information in whichever format best suits their needs.