Basic Accounting Standards and Business Structures
Whereas there is a need for accounting and financial professionals in the day-to-day operation of businesses to preserve their financial health, there is also a need by individuals. Whether it is the manager of an organization or individuals at home, who depend on professionals, it is necessary to have at a minimum a basic knowledge Accounting and financial concepts.
Sources for General Accepted Accounting Principles
According to Kieso, Weygandt, and Warfield, “This common set of standards and procedures is called generally accepted accounting principles (GAAP). The term “generally accepted” means either that an authoritative ...view middle of the document...
Smaller membership, full-time re-numerated membership, greater autonomy, increased independence, and broader representation (Kieso, Weygandt & Warfield, 2007, p .8).
Financial statements prepared by state and local governments are not comparable with financial reports prepared by private business organizations (Kieso, Weygandt & Warfield, 2007, p .10). The result of this is the creation of the General Accounting Standard Board (GASB) (Kieso, Weygandt & Warfiled, 2007). GSAB is similar to FSAB, has an advisory council called Governmental Accounting Standards Advisory Council (GSAC) with its own technical staff and advisory council (Kieso, Weygandt & Warfield, 2007, p .10).
The major sources of GAAP as follows: FASB Standards, Interpretations, and Staff Positions; APB Opinions; and AICPA Accounting Research Bulletins (Kieso, Weygandt & Warfield, 2007, p .12)
Effective Accounting Information
Accounting information is only useful, if it is relevant and reliable. According to Kieso, Weygandt, and Warfield, “To be relevant, accounting information must be capable of making a difference in a decision. Information with no bearing on a decision is irrelevant” (2007, p .32). Reliable information, “verifiable, is a faithful representation, and is reasonably free of error and bias” (Kieso, Weygandt& Warfield, 2007, p .33).