Entities Concerned with Accounting Standards

1. Individual and Public Accounting Firms

Individual and public accounting Firms are responsible though their auditors for independently certifying
that corporate financial statements present fairly

2. The American Institute of Certified Public Accounting (AICPA)

The AICPA has two important senior technical committees which are the Accounting Standard Executive
Committee (AcSec) and the Auditing Standards Committee (AuSec) . AICPA appointed a director of
accounting research in permanent staff.

3. The American Accounting Association (AAA)

The AAA is an organization of accounting academics and any individuals interested in the betterment of
accounting practice and theory. The AAA has attempted through such special committees to provide a
framework for corporate financial statement

4. The Financial Accounting Standard Board (FASB)

The FASB replaced the APB in 1973 as body responsible for establishing accounting standards. The
Financial Accounting Foundation (FAF) that would operate FASB and would be compounded by five
interest groups:
a. The Financial Executive Institute
b. The National Association of Accountants
c. The American Accounting Association
d. The Financial Analyst Federation
e. The Security Industry Association

The FASB is the authoritative, independent body charged with establishing and improving financial
accounting and reporting standards. The member of FASB are assumed to represent most parties
interested in financial accounting

5. The Securities and Exchange Commission (SEC)

Created by an Act of Congress in 1934, the SEC is primarily responsible for the administration of various
laws intended to regulate securities and to ensure proper financial reporting and disclosure by American
firm. SEC has the power management and the APB was the lower management. The SEC has relied on the
accounting profession and used its power to set constraints and exert veto power
6. Other Professional Organizations
Each of professional organizations is actively involved in setting accounting standards respective country
and in furthering the basic foundations of accounting
7. Users of Financial Statement
There are direct and indirect users.
Direct users include:
a. The owner of the corporation and its shareholder
b. The creditors and suppliers
c. The management of the firm
d. The taxing authorities
e. The laborers in an organization
f. The customers

Indirect users include:

a. Financial analyst and advisers

b. The stock exchange
c. Lawyers
d. Regulatory or registration authorities
e. The financial press and reporting agencies
f. Trade associations
g. Labor unions
h. Competitors
i. The general public
j. Other government departments