Environmental Factors Unions AICPA Lenders Securities and Exchange Investors Politicians Commission Accountants Others Provide input to Financial Accounting Standards Board Helpset Generally Accepted Accounting Principles
Environmental Factors Financial Accounting Standards Board Generally Accepted Accounting Principles Provide input to Help set Securities and Exchange Commission Unions Investors Accountants Politicians Lenders Others AICPA
Environmental Factors Securities and Exchange Commission(SEC) Independent, quasi-judicial government agency Administer securities regulations disclosures Can modify set GAAP, if necessary Rarely directly challenges FASB Major player in global accounting
Environmental Factors Securities and Exchange Commission (SEC) • Independent, quasi-judicial government agency • Administer securities regulations & disclosures • Can modify & set GAAP, if necessary • Rarely directly challenges FASB • Major player in global accounting
Environmental Factors International Accounting Standards (AS) Set by International Accounting Standards board Not currently accepted in U.s SEC under pressure to accept IAS
Environmental Factors International Accounting Standards (IAS) • Set by International Accounting Standards Board • Not currently accepted in U.S. • SEC under pressure to accept IAS
Environmental Factors Managers of Companies Main responsibility for fair accurate reports Applies accounting to reflect business activities o Managerial discretion is necessary in accounting e Major lobbyist on GAAP
Environmental Factors Managers of Companies • Set by International Accounting Standards Board • Not currently accepted in U.S. • SEC under pressure to accept IAS • Main responsibility for fair & accurate reports • Applies accounting to reflect business activities • Managerial discretion is necessary in accounting • Major lobbyist on GAAP
Environmental Factors Auditing SEC requires Audit Report e Audit opinion can be: clean(fairly presented)EXU qualified(except for disclaimer (no opinion) Auditors adverse(not fairly presented) Check Auditor quality independence
Environmental Factors Auditing • Set by International Accounting Standards Board • Not currently accepted in U.S. • SEC under pressure to accept IAS • SEC requires Audit Report • Audit opinion can be: - clean (fairly presented) - qualified (except for) - disclaimer (no opinion) - adverse (not fairly presented) • Check Auditor quality & independence Auditors