MAWLANA BHASHANI SCIENCE AND TECHNOLOGY

UNIVERSITY
Course title : Accounting Theory Course code : AIS 421

Assignment no : 01

Name of the Assignment : Accounting Professional Bodies

Submitted to :
Brishty Chakraborty
Assistant Professor
Department of Accounting
Mawlana Bhashani Science and Technology University
Santosh, Tangail-1902

Submitted by :
Name : Rakibul Islam
ID No : BBA 19018
4th year 2nd semester
Session: 2018-19
Department of Business Administration (Major in AIS)
Mawlana Bhashani Science and Technology University
Santosh, Tangail-1902

Date of formation: 31st July, 2023

Date of submission: 10th September,2023
 Professional Accounting Body

A professional accounting body is an organization or association of accountants in a

particular jurisdiction. Some countries have a single professional accounting body
while others have several. If there is more than one body, such bodies may or may
not compete with each other; in some countries, professional accounting bodies are
divided according to their field of activity. For example, India has two professional
accounting bodies, Bangladesh has four professional accounting bodies etc. Some of
the accounting professional bodies (their functions, area of works, membership,
objectives) are elaborates below.

1. Financial Accounting Standards Board (FASB)

The Financial Accounting Standard Board is a private, non-profit organization

established in 1973 to develop and improve accounting Standards in the United
States.

Its main function is to create and update Generally Accepted Accounting Principles
(GAAP) which guide financial reporting for companies and organizations. FASB's
work involves setting standards for financial reporting that provide transparency,
consistency, and comparability in financial statements. These help investors,
creditors, and other stakeholders make informed decisions. FASB collaborates with
the Securities and Exchange Commission (SEC) to ensure its standards. FASB
standard is recognized as authoritative by many other organizations, including State
Boards of Accountancy and the American Institute of CPAs (AICPA).
Functions of the Financial Accounting Standards Board

1. Establish reporting standards: The FASB's most important function is to

ensure that accountants and other intermediaries involved in handling
financial information create detailed reports, which are then shared with
Stakeholders.
2. Improve accounting standards: In the 21st Century, the FASB is examining
how technology approaches the field of accounting to harness some of the
benefits it can bring to the world of accounting.
3. Ensure information is transparent and useful for investors. In capital market,
it is necessary for investors to receive information surrounding a company's
profits and losses.
4. Create new accounting principles The FASB is responsible for creating new
principles that improve the system.
5. Enable the general public to be educated in accounting standards. FASB
makes sure to continually educate and update the knowledge and expertise of
its accountants.

The FASB plays a pivotal part in the functioning of several States. regulatory bodies
in the United.

2. American Institute of Certified Public Accountants

The American Institute of Certified Public Accountants (AICPA) is the national
professional organization of Certified Public Accountants (CPA) in the United
States. Founded in 1887 as the American Association of Public Accountants
(AAPA), the organization sets ethical standards and US auditing Standards. It is one
of the oldest and most prominent accounting organizations in the world.

Membership: More than 428,000 members in 130 countries.

Headquarters: Durham, North Carolina, United States.

Functions of AICPA

1. Setting Standards: the AICPA is known for issues auditing standards,

Generally Accepted Auditing. Standards (GAAS), as well as other accounting and
reporting standards to guide CPAS.

2. Ethical Guidelines: the AICPA establishes the Code of Professional Conduct,

which outlines ethical Standards and responsibilities for CPAs, promoting integrity,
objectivity, and professional behavior.

3. Advocacy The organization advocates: for Accounting Professional

Education (CPE) programs, and training to help CPAs stay Current with industry
developments and industry maintain their professional competence.

4. Research: the AICPA conducts research to address emerging issues in

providing valuable to practitioners. accounting and auditing in rights guidance.

Overall, the AICPA Serves as a professional association that promotes and supports
the accounting profession. It plays a crucial role in maintaining high quality
accounting practices, Supporting the professional development of CPAs, and
contributing to the ongoing advancement of the accounting profession in the United
States.

In a nutshell, The American Institute of CPA (AICPA) and its predecessors have
served the public interest for 136 as in years 2017, they came together. AICPA &
CIMA to forge powerful international alliance that promotes. accounting and finance
in every corner of the world.
3. Accounting Principle Bound (APB)
The Accounting Principle Board was created by the American Institute of Certified
Public Accountants (AICPA) in 1959 as an authoritative body for the purpose of
issuing guidelines and rules on accounting principles. The Accounting Principle
Board was replaced by the Financial Accounting Board (FASB) in 1973 purpose of
the APB was to issue guidelines and rules on accounting principles Some of the
opinions released by the APB Still as part of the Generally Accepted Accounting
Principles (GAAP), but mast have been either amended on entirely. Suspended on
superseded by FASB Statements. The APB was in existence from 1959 to 1973.
During the 14 years of its existence, the Accounting Principle Board issued 3.1
options and four statements related to income takes, intangibles, early
extinguishment of debt, lease, business combination, and others. It also had Issued
opinions on accounting policies disclosure and interim financial data reporting
among others. The membership of the Accounting Principles Board varied between
18 and 21, with most participants coming from the major accounting films.

Reasons for the replacement

The APB was replaced in 1973 by the FASB the main reasons for the replacement
were:

• The need for an independent organization was considered necessary, since

there was a potential for the APB to be influenced by its parent organization.
• The Small amount by the APB of output generated
• The large number of qualified approvals appended to APB opinion documents
by APB members.
4. International Accounting Standards Committee
The IASC was founded in June 1973 in London at the initiative of Sin Henry
Benson, former president of the Institute of Chartered Accountants in England and
Wales. The IASC was created from 6 by national accountancy bodies. number of
Countries with a view to harmonizing the international diversity.

Between its founding in 1973 and its dissolution in 2001, it developed a set of
International Accounting Standards (IAS) that gradually acquired a degree of
accepted in countries around the world.

On 1 April 2001, IASC was replaced by the International Accounting Standard

Board (IASB). The IASC was founded as a result of an agreement between
accounting bodies.

Elements of the IASC Structure

Major components of the IASC structure were:

i. IASC board: the standard setting board.

ii. Consultative Group: advisory body representing a wide range of an
international organization.
iii. Steering Committees: expert task forces for individual agenda projects.

Professional accounting bodies play a crucial role in the global business and financial
landscape. Here are some of the key importance of these organizations around the
world:

1. Standardization and Consistency: Professional accounting bodies establish

accounting standards and guidelines that promote uniformity and consistency in
financial reporting. This ensures that financial information is comparable across
different companies and countries, making it easier for investors, creditors, and
regulators to assess financial performance.

2. Quality Assurance: These bodies set rigorous educational and professional

qualification requirements for accountants. This helps ensure that individuals
working in the accounting field possess the necessary knowledge and skills to
perform their duties competently and ethically.

3. Ethical Framework: Accounting bodies often have a strong focus on ethics,

which is vital in maintaining the integrity of financial reporting. They provide a code
of ethics that guides accountants in making ethical decisions and conducting
themselves with integrity and professionalism.

4. Regulation and Oversight: Many accounting bodies have regulatory authority,

overseeing the activities of their members and the firms they work for. This helps
maintain public trust in financial markets by holding accountants accountable for
their actions and ensuring compliance with relevant laws and regulations.

5. International Harmonization: In an increasingly globalized business

environment, professional accounting bodies work towards harmonizing accounting
standards across countries. This reduces the complexity of international financial
reporting and facilitates cross-border investments and trade.

6. Research and Development: Many accounting bodies invest in research and

development efforts to advance the field of accounting. This includes conducting
research on accounting best practices, emerging issues, and innovative technologies
that can improve financial reporting and decision-making.

7. Advocacy: Professional accounting bodies often serve as advocates for the

accounting profession, representing the interests of accountants and promoting
policies that support the profession's growth and development.
In summary, professional accounting bodies play a vital role in maintaining the
quality, integrity, and credibility of financial information globally. They contribute
to the effective functioning of financial markets, support economic growth, and help
safeguard the interests of investors and the public.