Question

Briefly describe the two predecessors of the FASB.

Answer 1

THE TWO PREDECESSORS OF FASB ARE:

COMMITTEE ON ACCOUNTING PROCEDURE(1936-1946):(CAP)

Set up in 1936 by American Institute of Accountants(AIA, now called AICPA), CAP is a committee designed to improve and maintain the standards of accounting practice. Though it is inactive until 1938, CAP began responding to ASR-4 in 1939.

During that phase(*1938-39) it issued 12 Accounting Research Bulletins(ARB'S). Started with 7 members it further extended to 21 members.

* The period between 1946-1959 is called POST WAR PERIOD.

ACCOUNTING PRINCIPLES BOARD(1959-1973):(APB)

Set up by American Institute of Certified Public Accountants(AICPA) in 1959, the APB primary duty is to issue various pronouncements and accounting principles. It issued 31 Opinions and 4 Statements during its operations.

Due to the lack of sufficient operational independence, it has been later succeeded by FASB( Financial Accounting Standard Board).