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Basic Accounting Standards and Business Structures

Whereas there is a need for accounting and financial professionals in the day-to-day operation of businesses to preserve their financial health, there is also a need by individuals. Whether it is the manager of an organization or individuals at home, who depend on professionals, it is necessary to have at a minimum a basic knowledge Accounting and financial concepts. Sources for General Accepted Accounting Principles
According to Kieso, Weygandt, and Warfield, “This common set of standards and procedures is called generally accepted accounting principles (GAAP). The term “generally accepted” means either that an authoritative accounting rule-making body has established a principle of reporting in a given area or that overtime a given practice” (2007, p .6).There are four such bodies.
The Securities and Exchange Commission (SEC) is a federal agency charged with developing and standardizing financial information presented to stockholders. (Kieso, Weygandt & Warfield, 2007, p .6). The SEC does not work by itself even though it is independent, but in partnership with the private sector. The American Institute of Certified Public Accountants (AICPA) is the national professional organization of practicing Certified Public Accountants (CPAs) (Kieso, Weygandt & Warfield, 2007, p .7). Kieso Weygandt and Warfield stated, “The Wheat Committee’s recommendations resulted in the demise of the APB and the creation of a new standard-setting structure composed of three organizations—the Financial Accounting Foundation (FAF), the Financial Accounting Standards Board (FASB) and the Financial Accounting Standards Advisory Council (FASAC) (2007, p. 8). The FASB mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public. The new FASB relied on

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