Answer
a. The USA uses model three (Public/Private Partnership) to set accounting standards. FASB and AICPA are the major private-sector players participating in developing accounting standards. The SEC, a government agency, endorses and enforces the standards developed by the private sector players.
b. They are users who will bear the "Economic Consequences" of the standards set by the FASB. Therefore, they are involved and invested in formulating the standards because they want them to be beneficial instead of detrimental.
c. The London-based International Accounting Standards Board (IASB) sets and issues accounting standards (International Financial Reporting Standards –IFRS). These standards cater to the listed entities in European Union. American entities comply with the GAAP.
Work Step by Step
a. The USA uses model three (Public/Private Partnership) to set accounting standards. FASB and AICPA are the major private-sector players participating in developing accounting standards. The SEC, a government agency, endorses and enforces the standards developed by the private sector players.
b. They are users who will bear the "Economic Consequences" of the standards set by the FASB. Therefore, they are involved and invested in formulating the standards because they want them to be beneficial instead of detrimental.
c. The London-based International Accounting Standards Board (IASB) sets and issues accounting standards (International Financial Reporting Standards –IFRS). These standards cater to the listed entities in European Union. American entities comply with the GAAP.
