Describe the mission of the FASB.
Week 1 DQ 1 FASB and Ethics
Research Case 1-3 p. 45
The purpose of this case is to introduce you to the information available on the website of the Financial Accounting Standards Board (FASB).
Access the FASB home page on the Internet. The web address is www.fasb.org. Answer the following questions.
1. Describe the mission of the FASB.
2. Who are the current Board members? Briefly describe their backgrounds.
3. How are topics added to the FASB’s technical agenda?
Mission of the FASB
Board Members & their Background
Ethics Case 1-8 p. 46
It is the responsibility of management to apply accounting standards when communicating with investors and creditors through financial statements. Another group, auditors, serves as an independent intermediary to help ensure that management has in fact appropriately applied GAAP in preparing the company’s financial statements. Auditors examine (audit) financial statements to express a professional, independent opinion. The opinion reflects the auditors’ assessment of the statements’ fairness, which is determined by the extent to which they are prepared in compliance with GAAP.
Some feel that it is impossible for an auditor to give an independent opinion on a company’s financial statements because the auditors’ fees for performing the audit are paid by the company. In addition to the audit fee, quite often the auditor performs other services for the company such as preparing the company’s income tax returns.
How might an auditor’s ethics be challenged while performing an audit?
Discussion should include these elements:
Auditors’ role in examining financial statements
Who is affected?
Ethical issues or challenges