CA1-12 (GAAP Terminology) SOLUTION

CA1-12 
(GAAP Terminology) Wayne Rogers, an administrator at a major university, recently said, “I’ve got some CDs in my IRA, which I set up to beat the IRS.” As elsewhere, in the world of accounting and finance, it often helps to be fluent in abbreviations and acronyms.
Instructions
Presented below is a list of common accounting acronyms. Identify the term for which each acronym
stands, and provide a brief definition of each term.
(a) AICPA (e) FAF (i) CPA
(b) CAP (f) FASAC (j) FASB
(c) ARB (g) SOP (k) SEC
(d) APB (h) GAAP (l) IASB

Solution

a. AICPA. American Institute of Certified Public Accountants. The national organization of practicing certified public accountants.

b. CAP. Committee on Accounting Procedure. A committee of practicing CPAs which issued

51 Accounting Research Bulletins between 1939 and 1959 and is a predecessor of the FASB.

c. ARB. Accounting Research Bulletins. Official pronouncements of the committee on accounting Procedure which, unless superseded, remain a primary source of GAAP.
d. APB. Accounting Principles Board. A committee of public accountants, industry accountants and academicians which issued 31 Opinions between 1959 and 1973. The APB replaced the CAP

and was itself replaced by the FASB. Its opinions, unless superseded, remain a primary source
of GAAP.

e. FAF. Financial Accounting Foundation. An organization whose purpose is to select members of the FASB and its Advisory Councils, fund their activities, and exercise general oversight.

f. FASAC. Financial Accounting Standards Advisory Council. An organization whose purpose is to consult with the FASB on issues, project priorities, and select task forces.
g. SOP. Statements of Position. Statements issued by the AICPA (Through the accounting standards executive committee of its accounting standards division) which are generally devoted to emerging problems not addressed by the FASB or the SEC.  
h. GAAP. Generally accepted accounting principles. A common set of standards, principles, and procedures which have substantial authoritative support and have been accepted as appropriate because of universal application.

i. CPA. Certified public accountant. An accountant who has fulfilled certain education and experience requirements and passed a rigorous examination. Most CPAs offer auditing, tax, and management consulting services to the general public. 
j. FASB. Financial Accounting Standards Board. The primary body which currently establishes and improves financial accounting and reporting standards for the guidance of issues, auditors, users and others.
k. SEC. Securities and Exchange Commission. An independent regulatory agency of the United States government which administers the Securities Acts of 1933 and 1934 and other acts.

l. IASB. International Accounting Standards Board. An international group, formed in 1973, that is actively developing and issuing accounting standards that will have international appeal and hopefully support.