Financial Reporting Private And Public Accounting

Private Company Financial Reporting Background Information Private and public accounting have long been discussed and disputed in regards to financial reporting. Since the Financial Accounting Standards Board (FASB) was created in 1973, accountants have called for different accounting regulations for private and public accounting sectors, as private companies do not have the resources to meet the complex requirements of public companies. Private companies currently are not required by law to issue annual or quarterly financial statements. Private companies do, however, have the option to apply the U.S. Generally Accepted Accounting Principles (GAAP), cash basis, or accrual accounting to their financial statements (James, 2012). When the FASB was created it had a mission statement â€Å"to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports† (James, 2012). FABS was created as the financial accounting and reporting rules for both private and public companies. However, since financial reporting was so complex, there were other accounting organizations within FASB that stepped in to assist with creating different accounting policies and procedures for financial reporting. The Financial Accounting Foundation (FAF), through FASB, and the Governmental Accounting Standards Board (GASB) assisted in developingShow MoreRelatedHistory Of Accounting And Private Sector1534 Words   |  7 PagesIntroduction Since the early 1980s public sector accounting and private sector accounting have experienced significant transformation such as decentralization, deregulation and the differences between thee two sectors are highly topical and political in many countries (Blondal 2003). The key transformation is the adoption of ‘accrual basis’ of accounting rather than ‘cash basis’ accounting by increasing number of countries (Guthrie and Ryan 1998). Meanwhile, public sectors refer specifically to organizationsRead MoreThe Committee For The Equity Funding Among Other Scandals770 Words   |  4 Pagesdevelopments that ensued. These included the designation of the Cohen Commission to the Equity Funding among other scandals. Moreover, there was the institution of a SEC Practice Section and a Private Companies Practice Section that was tasked to do peer review and quality review. The promulgation of SEC’s Accounting Series Release 250 that required corporations to repor t to the ratio of non-audit to audit fees was also one of the developments. Finally, there was the issuance of SSARs No. 1 that describedRead MoreGovernment Accounting Standards Board versus Financial Accounting Standards Board1022 Words   |  5 PagesIn accounting, private companies are treated differently than governmental and non-profit companies. However governmental and non-profit companies use different reporting requirements from the private sector. The requirements for governmental companies use the Government Accounting Standards Board (GASB), whereas profit and non-profit companies use the Financial Accounting Standards Board. This paper will explain the purpose, discus the similarities, and differences between the GASB and FASB. Read MoreEssay Gasb and Fasb Analysis696 Words   |  3 Pages Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) Analysis Paper Mandy Diaz University of Phoenix Marie Romero ACC 460 / Government and Non-Profit Accounting March 30, 2010 Governmental Accounting Standards Board and Financial Accounting Standards Board This paper will be aimed at comparing and contrasting governmental (GASB) which is Governmental Accounting Standards Board and proprietary (FASB) which is Financial Accounting Standards BoardRead MoreThe Reporting Entity Concept Of The Australian Accounting Standards Board1027 Words   |  5 PagesQuestion 1A 1B The Reporting Entity Concept makes up part of the Australian Accounting Standards Board (AASB) Conceptual Framework and has been in use since its inception in Australian Accounting Standards in the early 90s (Hamidi-Ravari, 2014). The creation of Statement of Accounting Concept 1 (SAC 1) has allowed for businesses to determine if they are a reporting entity by outlining the various criteria applicable to such decision making. International Financial Reporting Standards (IFRS, n.dRead MoreInternational Accounting Standards Board ( Iasb )1543 Words   |  7 PagesInternational Accounting Standards Board (IASB) The international Accounting Standards Board (IASB) is an independent, private sector that develops and approves the body of the International Financial Reporting Standards (IFRS). The IASB manages and controls the IFRS foundation. The IASB has a group of 14 members who operates and manages the IFRS through daily meetings, community engagements, and speeches about the IFRS. These members are experts in accounting standards, preparing, auditing, financial reportingRead MoreFinancial Interests Of The Big 4 Accounting Firms And A Private Cartel Designed And Promoted For The Benefit Of Essay1427 Words   |  6 PagesQ4. Murphy claimed that IASB does not act in public interest that it is a private cartel designed and promoted for the benefit of the Big 4 accounting firms. This is not groundless suspicion in considering the mutual interests and alliance lie between them. Big accounting firms have always been involved in standard setting. Especially the Big 4, pointed out by Albu et al. (2011), always participate in standard setting process and develop guidance on the application of standards. In fact, a largeRead MoreIntermediate Accounting I Final Paper1750 Words   |  7 PagesIn 1973, the Financial Accounting Standards Board (FASB) was created and their mission is â€Å"to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.† (FASB.org, 2009a). The FASB is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States. The Securities and Exchange Commission (SEC)Read MorePublic And Private Company Council899 Words   |  4 Pages The Private Company Council For decades, there has been a separation between public and private companies and the method in which they account for their activities. As a result, there can be great complexity in the preparation of the financial statements for private entities who have been required to conform to the reporting standards of public companies. This has led to poor comparability among companies and has left investors frustrated. In 2012, as an attempt to remedy this situation, a councilRead MoreAccounting Standards And Financial Reporting Essay1508 Words   |  7 PagesSpiceland, Sepe, and Tomassini (2007), â€Å"accrual accounting is the financial reporting model used by† most corporations; which in turn, enables â€Å"investors and creditors †¦ to make their resource allocation decision† (Financial Reporting Case, para. 1). In other words, due to organizations using the same standards for financial reporting, external parties are able to compare the financial condition betwe en businesses (Spiceland, et al., 2007). Although accounting standards have evolved over the decades,