By David Mosso

ISBN-10: 1848556446

ISBN-13: 9781848556447

This booklet contends that the present accounting version, that is used world wide, and the present accounting regular environment procedure are heavily poor. The e-book describes the deficiencies in an old context and proposes whole new types to right the deficiencies. One is an accounting version referred to as the 'wealth dimension early caution model'. the opposite is a customary atmosphere method version known as the 'quick reaction model'. the recent types are progressive and debatable. they're innovative within the experience of enforcing wide adjustments at the accounting institution, but additionally simply because they've got 3 features which are absolutely absent within the present approach: they're easy to appreciate and observe; they're fast to reply to questions on new events; and, they're reflective of monetary occasions as they ensue.

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Additional info for Early Warning and Quick Response: Accounting in the 21st Century, Volume 12

Example text

Creditors do not. EQUITY DEFINED The balance sheet element called owners’ equity, or net assets, has no independent identity in the current accounting model. It is described as a residual, the difference between assets and liabilities. However, a residual is not a definition. A residual does not include or exclude anything, as an independent definition should do. This leaves the equity element open to classification errors in applying the asset and liability definitions and therefore to inaccurate measurement of wealth and financial health.

To counter the implicit threat of an SEC takeover of accounting standard Standard Setting: Undue Process 35 setting, the FASB was chartered in 1973. The FASB was designed to be independent of the AICPA and of corporations and their auditors. That was the design, but as a regulatory body without statutory authority (the SEC had that), without enforcement authority (the SEC and the AICPA had that), without a controllable source of financing (the auditing firms and their corporate clients had that), and with a trustee oversight body made up mostly of representatives of audit firms and their corporate clients (the regulated overseeing the regulator), the FASB’s independence, and its ability to make tough unpopular decisions, was extremely fragile.

36 EARLY WARNING AND QUICK RESPONSE Nor does it include quarterly meetings with the Board’s standing advisory council and occasional meetings with the SEC Commissioners. Without genuine independence, the FASB did not have the power to bang the gavel when it had heard enough. Corporate pressure, with auditor support, Congressional pressure, and even White House involvement made gavel banging a risky business, threatening the FASB’s existence. So the FASB would stretch due process, striving for a reasonably acceptable solution and usually settling for a diluted solution, or just letting a project die from exhaustion.

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Early Warning and Quick Response: Accounting in the 21st Century, Volume 12 by David Mosso


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