Quiz – US Accounting Standards
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Which has the statutory authority to set the accounting standards America?
Which has the statutory authority to set the accounting standards America?
Financial accounting’s primary function is to furnish relevant financial information to entities external to a business enterprise.
Accrual accounting aims to record revenues and expenses in the period in which they were incurred, such that they represent net operating cash flow.
The FASB sets US public sector accounting standards.
The FASB’s due process provides an opportunity for various stakeholders to express their views on whether financial accounting standards should be revised.
Political interference has been minimal in the FASB’s accounting for stock-based compensation.
The Sarbanes-Oxley Act of 2002 transferred the responsibility of establishing auditing standards for public companies in the U.S. to a different entity.
A rules-based approach to standard-setting emphasizes the use of professional judgment rather than adhering to a strict set of rules.
The SEC is empowered under federal securities laws to establish accounting standards within the United States.
Auditors are primarily responsible for applying GAAP correctly when communicating financial statements to investors and creditors on behalf of a firm.