Stung by criticism that the Committee on Accounting Procedure (CAP) did not reduce alternative accounting principles, the AICPA appointed a special committee to recommend “definite steps to lead in the thinking on unsettled and controversial issues.” (10) The committee’s report in September 1958 led to the establishment of the Accounting Principles Board (APB), replacing the CAP one year later.Īccounting research was considered critical. Blough, “Development of Accounting Principles in the United States” “It is difficult for me to see how anyone who has knowledge of accounting as it was practiced during the first quarter of this century and how it is practiced today can fail to recognize the tremendous advances that have taken place in the art. Financial Accounting Standards Board: Operationįinding the Right Structure Accounting Principles Board (1959 - 1973): Organization.Financial Accounting Standards Board: Organization.Accounting Principles Board: Organization.As a result, the FASB has created more contents covering a varied range of accounting theory and its practices. The Financial Accounting Standards Board was created with fully-funded full-time staffs so that they can devote more time and can work independently. The members of the Accounting Principles Board operated on a part-time basis and thus the output was low. It was argued that there were chances of APB getting influenced by its parent organization. The types of transactional activity got changed over time, and to deal with it the need for an independent organization was felt necessary. The Accounting Principles Board played important roles in maintaining the standards and laying the foundation of the Generally Accepted Accounting Principles but with time it too became ineffective and failed to keep up the pace with the ever-changing corporate America. Support of two-third members was required for issuing an opinion.īefore the Accounting Principles Board, there was a Committee on Accounting Procedure, but it was considered ineffective in maintaining the standards and integrity of the accounting practice. The participants were representatives from major accounting firms, academia, and industry. The membership of the Accounting Principles Board varied between 18 and 21. The statements and opinions published by the Accounting Principle Board were instrumental in promoting good practice in accounting and improving its theories. Some of its opinions are still part of the Generally Accepted Accounting Principles (GAAP), but most of those are either amended or abolished by the Financial Accounting Standards Board. It also had issued opinions on accounting policies disclosure and interim financial data reporting among others. The Accounting Principle Board was replaced by the Financial Accounting Standards Board (FASB) in 1973.īack to: Accounting & Taxation What Does the Accounting Principles Board Do?ĭuring the 14 years of its existence, the Accounting Principle Board issued 31 opinions and four statements related to income taxes, intangibles, early extinguishment of debt, lease, business combination, and others. The Accounting Principle Board was created by the American Institute of Certified Public Accountants (AICPA) in 1959 as an authoritative body for the purpose of issuing guidelines and rules on accounting principles.
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Update Table of Contents What is the Accounting Principles Board? What Does the Accounting Principles Board Do? What is the Accounting Principles Board?
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