Audited financial statements, related footnotes and supplementary data are presented in both annual reports sent to stockholders and those filed with the SEC. These filings often contain other valuable information not presented in stockholder reports. Quarterly financial reports and SEC 10-Q filings, both of which contain abbreviated financial statements, may be reviewed by auditors but are rarely audited.
The American Institute of Certified Public Accountants: The American Institute of Certified Public Accountants (AICPA) is the national professional organization of certified public accountants (CPAs). The AICPA's efforts have been central to the development of GAAP in the United States. Over the years it has formed, with various levels of success, a number of special committees whose purposes were to determine, among other things, proper accounting principles.
After the Depression, the AICPA formed the Committee on Accounting Procedure (CAP), the institute's first attempt to address modern accounting issues. From 1939 to 1959, CAP issued 51 Accounting Research Bulletins dealing with a variety of accounting problems. Despite all of CAP's successes, it did not generate the necessary structured set of accounting principles. Thus, the AICPA formed the Accounting Principles Board (APB) in 1959.
The APB was formed to develop a well-defined conceptual framework that would set forth a written set of accounting principles, determine appropriate accounting practices and address inconsistencies in current accounting practice. From inception to its dissolution in 1973, the board issued 31 APB Opinions. However, while these opinions succeeded in solidifying accounting practice to some degree, the APB ultimately failed due to charges of a lack of productivity, a failure to act quickly in correcting abuses, a strong level of dissention from CPA firms and occasional government intervention. Thus, in 1973, the Financial Accounting Standards Board was formed.
The Financial Accounting Standards Board: The Financial Accounting Standards Board (FASB) is a nongovernmental body with seven full-time members that sets accounting standards for all companies issuing audited financial statements. FASB pronouncements are considered authoritative and immediately become part of GAAP, the governing framework for financial reporting in the United States.
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