Question

CA1-1 (FASB and Standard-Setting) Presented below are four statements which you are to identify as true or false. If false, explain why the statement is false.

Mostly interested in 1-3 as this is the question to be answered for homework. Please provide research and references. Thank You
CA1-1 (FASB and Standard-Setting) Presented below are four statements which you are to identify as true or false. If false, explain why the statement is false.
1. GAAP is the term used to indicate the whole body of FASB authoritative literature.
2. Any company claiming compliance with GAAP must comply with most standards and interpretations
but does not have to follow the disclosure requirements.
3. The primary governmental body that has influence over the FASB is the SEC.
4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.

Answer 1

1. GAAP is the term used to indicate the whole body of FASB authoritative literature.

⇒ TRUE

2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.

⇒ FALSE

In order to comply with GAAP, companies must comply with all (not just most) the standards and interpretations. This includes all the disclosure requirements. You cannot simply choose which standards to follow and which not to follow.

3. The primary governmental body that has influence over the FASB is the SEC.

⇒ TRUE

4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.

⇒ FALSE

The second premise by which the FASB works states that it must operate through a due process system and their work must be available to the general public.