Section 5
Conventions and Standards
By Boundless
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The SEC enforces and regulates security laws, the AICPA dictates the professional conduct of accountants, and the FASB develops GAAP.
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Generally Accepted Accounting Principles (GAAP) is the standard framework for financial accounting used in any given jurisdiction.
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The IFRS is a common global financial language for business affairs that is understandable and comparable across international boundaries.
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A major difference between GAAP and IFRS is that GAAP is rule-based, whereas IFRS is principle-based.
The full disclosure principle states information important enough to influence decisions of an informed user should be disclosed.
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The process of disclosing financial statements is carried out through what is known as a Form 10-K.
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Events that trigger disclosure should be based on an accountant's assessment of materiality.
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Accountants must stay up to date with current issues in reporting and disclosures related to standards set by regulatory agencies.