Question

Why is the relationship between AICPA and FASB important to understand?

Answer 1

The relationship between AICPA and FASB is important to understand especially for an accounting and finance professional. This is because every business entity generates revenue and this revenue will have to be recognized. The onus is on the accounting professional to understand and know when to recognize revenue. The relationship between AICPA and FASB guides accountants and is the designated accounting standards for all public companies, while the AICPA’s goal is to keep the accounting standard setting process free from any political interest.

Thus both AICPA and FASB play important roles with regards to accounting standards and the relationship between the two will enable an accounting professional to better understand the implications of the accounting standards.