The board's proposed standard, which would be directed at companies and other reporting entities, would replace a current standard directed at auditors.
These days, it's rare to find an accounting standard that's not awash in some type of controversy. But with its latest initiative, the Financial Accounting Standards Board has finally given Corporate America nothing to gripe about.
FASB insists that its proposed standard, The Hierarchy of Generally Accepted Accounting Principles, should have little or no impact on the practice of preparing financial statements, in part because it has been effective for decades under the American Society of Certified Public Accountants. The AICPA established the five levels of hierarchy in 1975 in Statement on Auditing Standard No. 69, which defines GAAP and provides accountants with guidance on where to turn for answers to certain questions: FASB standards, the Emerging Issues Task Force, and so on.
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