Charlie Munger once stated, “You have to know accounting. It’s the language of practical business life.” This statement emphasizes that accounting has become the center of the business world. With the world now being focused around businesses and the idea of how to make the next dollar it’s obvious that the accounting field is rapidly becoming the most influential field in the world today. With these occurrences comes regulation, and when I say regulation I mean stiff government regulations on how financial reporting is done. There are many theories as to why there is an increase in accounting regulations. One is the emphasis on the accuracy of accounting period, another being the development of ethical codes being promoted in college courses, and another being increasing competition among businesses and the strive to be the top firm. Regardless, the Federal Government requires intense regulations that require financial reporting to be clear, concise, and accurate.
To help ensure accuracy and legitimacy among financial reports the Federal Accounting Standards Advisory Board (FASAB) was developed in 1990 by the Secretary of Treasury, Director of Office Management and Budget, and the Comptroller General. The board consists of nine members including one representative of the Congressional Budget Office, one representative of the defense and international agencies, one representative of civilian agencies, and three representatives from private sectors. FASAB was created to help form accounting principles and regulations that would help the federal government ensure that all financial reports were handled properly and met the requirements the board has set forth. This board established boundaries and rules for every cost under the s...
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...ng that the government would not accept anything less than accurate financial records. With increasing competition and education about business ethics gives the American business world a bright future at how to properly report its finances. Intensive accounting regulations will only help grow the American economy.
Federal Accounting Standards Advisory Board. By Elmer B. Staats and board. 31 Dec. 1996
L. Murphy Smith, Katherine T. Smith and Elizabeth Vallery Mulig. Journal of Business Ethics.
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(published by Springer, article url: http://www.jstor.org/stable/25123611)
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(published by American Accounting Association, article url: http://www.jstor.org/stable/4093169)