Much as we legal researchers would like to confine our contact with accounting to reading the headlines of Enron and Arthur Anderson's recent travails, we are often asked to find primary source materials and rules of accounting. We cannot be involved in corporate law without needing to understand acronyms like FASB and GAAP. Litigators also find themselves looking for this material to comprehend the complexities of shareholder suits orcompany books. This column is designed to give researchers starting points for locating accounting materials and literature. This particular column cannot address all the nuances of accounting research or even all the sources that might be useful. Our hope is that this outline will assist researchers to take the first steps into accounting literature.
Accounting is one game you cannot play until you know the signals and there are plenty of acronyms for the novice to learn. Zimmerman's Research Guide here at LLRXincludes the most crucial terms. But how do these various acronyms relate to each other? Some background is necessary. Under the Securities and Exchange Act of 1934 (15 USC 78a-78jj) the Securities and Exchange Commission (SEC) has the authority to develop financial accounting and reporting standards for publicly held companies. The legal researcher may think, therefore, that these rules and standards will all appear in the Code of Federal Regulations (CFR). Alas, no. The SEC has relied in large part on the private sector to establish financial accounting standards.
If the SEC doesn't develop the bulk of accounting standards, who does? Generally Accepted Accounting Principles (GAAP) have evolved through the following timeline:
|The Committee on Accounting Procedure (CAP) of the American Institute of Certified Public Accountants (AICPA) issues 51 Accounting Research Bulletins (ARB).|
|The Accounting Principles Board (APB) of the AICPA issues 31 APB Opinions.|
|The Financial Accounting Standards Board (FASB) develops GAAP through the issuance of Statements of Financial Accounting Standards (SFAS). As of this writing there have been 144 SFAS issued. The framework behind the development of these standards is the more theoretical material contained in the Statement of Financial Accounting Concepts (SFAC).|
|FASB created the Emerging Issues Task Force (EITF) which issues EITF statements which address current, late-breaking issues in financial accounting.|
Like species on other evolutionary ladders, an old opinion or standard is still viable unless superseded.The researcher may also find trails that continually refer back to the original standard despite some alterations made more recently.
Now that we have some sense of the progression of these accounting standards, where do we get them? It is important to note that accounting standards are not free. There are several avenues available to obtain the standards, but expect to pay for them and in some cases the hard copy has to be mailed to you rather than downloaded or faxed. Be aware of this delay if your need is urgent.
- If you have a reference to a FASB standard such as Statement of Financial Accounting Standard (SFAS) 144, you can quickly obtain a summary and the status of the Statement by going to FASB publication index.To obtain the full text of the standard, you can order online -individual standards cost$13.75 - but you cannot download or receive the standard by fax.You can also set up subscriptions to standards and other publications.
- If you have a reference to older material such as anARB or APB you may find them still available and published in the FASB three-volume set called Original Pronouncements. This set contains all standards and opinions "not completely superseded". You may want to invest in the FASB software called FARS (Financial Accounting Research System) which claims to include "all necessary accounting literature." You can obtain subscription information at the FASB website under publications.
- If you are asked to find proposed changes to FASB standards you may be able to obtain full-text if the changes are still in the "Exposure Draft" form. These drafts are posted on the FASB website and can be printed in full during a comment period and before the changes are formally adopted.
- If you need information on U.S. - International accounting standards, you can try the FASB website or the SEC. International accounting concepts are published as SEC releases and can be found in full-text at both websites as well as in print sources such as CCH Federal Securities Law Reporter.
- If ethics issues are your concern, you need to look at the professionals who practice accounting. You can find considerable information including auditor standards at the AICPA website.
With all of these professional organizations providing standards, you may be wondering what does the SEC do?Primarily enforcement.Thus, you can find Accounting and Auditing Enforcement Releases (AAER) in the CCH Federal Securities Law Reporterand Staff Accounting Bulletins (SAB) which provide guidance in applying accounting principles in CCH and at the SEC website.
A web site that offers plenty of helpful links to accounting resources is RAW--Rutgers Accounting Web. The Rutgers site includes links to the big 5 accounting firms, FASB, SEC, educational institutions and associations of Certified Public Accountants (CPAs).Handy print starting points for accounting research are the U.S. Master GAAP Guide published by CCH or the Miller GAAP Guide published by Aspen Publishers.The sources above are not the only sources available for accounting information, but a novice can begin with the sources above to obtain primary materials.
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15 USC 78a-78jj