Question

19. what is the difference between the Codilication and the Codification Besearch Sistem? 2.13-14 21. What are the sources of pressure develomange and influence the development of GAAP) p.15 Hustration *23. If you were given comdete authonty the that GAAP should be developed and streningu wowd you, propose enforced? ds. What is the expectations pop'? what is the profession doing to try to Close this gap?p.160 27. What are some of the major challenges facing the accounting profession?" D.18 U 10)

Answer 1

19) Codification Codification Research

  

It means coding of all Accounting Standards contained within Generally Accepted Acccounting Principles	It means to do research in Accounting Principles within the Generally Accepted Accounting Standards.
Intention: Organise Accounting Standards.	Increase efficiensy in search for information/data within the Accounting Standards.
Provide a structure for ease of user to acess and find data.	Analysing and implementing new methodology to improve the codes and reduce the time taken by users.
Simplify user acess and actual representation of authoritative U.S GAAP	To create a codification research system that is up to date for the released results of standard-setting activity.

21) I believe it would be organizations like the SEC, FASB, or AICPA can influence GAAP's development.

Primarily ,The U.S Securities and Exchange Commission regulates interstate securities transactions and strives to protect investors and prevent fraud. Eventhough the SEC does not set GAAP, they have an influencial part in setting of GAAP. The U.S. Securities and Exchange Commission (SEC) requires publicly traded companies and other regulated companies to follow GAAP for financial reporting. The SEC encouraged the establishment of private standard-setting bodies through the AICPA and later the FASB, believing that the private sector had the proper knowledge, resources, and talents. The SEC works closely with various private organizations setting GAAP, but does not set GAAP itself.

Then comes the Financial Accounting Standards Board.

The FASB derives its authority to set accounting standards from the U.S. Securities and Exchange Commission (SEC). ... The mission of the FASB is to establish and improve financial accounting and reporting standards to provide decision-useful information to investors and other users of financial reports

The FASB  is funded by a combination of publishing revenue, accounting support fees, and investment income.So the incoming funds can also pressurise the FASB's operations.

And the American Institute of Certified Public Accountants are facing unprecedented changes in financial reporting. Economic, regulatory, and global forces are demanding higher-quality reporting while standards are in continual flux. While the Financial Accounting Standards Board (FASB) is proposing significant changes to U.S. generally accepted accounting principles there is an ever-increasing pressure for differentiation between public and private entity standards. The information and resources here will help you stay informed of changes to accounting standards and provide you guidance to ensure high quality financial reporting.

The main objective of these Boards to GAAP is to make the accounting process uniform so financial reports are comparable from one company to another.

So in light of the above said , these bodies can pressure that change and influence the devolopment of GAAP in various ways.

23)   

If i was given authority in the matters of GAAP then i would try to make GAAP uniformly accepted world wide. The purpose of GAAP is to create a uniform standard for financial reporting. When financial information is made available to the public, it should serve the purpose of helping investors make informed decisions as to where to put their money.

Only with the proper support pof the concerned Government authority GAAP can be implemented properly and enforced.

25)

EXPECTATION GAP, in accounting, is the gap between an auditors actual standard of performance and the more rigorous public expectation of what an auditors performance should be. The users of financial statements should be allowed to expect that the auditors materiality levels correspond with their own. If this is not the case an expectation gap will arise. Especially if the financial statements contain non-corrected known errors or omissions classified as immaterial by the auditor, but classified as material by the users. The unknown material errors and omissions are still a part of the audit risk.