The staff presented the results of research and initial recommendations regarding the proposed direction of the project in December 2007. The hierarchy issue was initially included in the broader AICPA Omnibus project, but was separated in preparation for the July 2008 Board meeting so that the GASB and the Federal Accounting Standards Advisory Board (FASAB) could address the issue in a joint project. The selection of principles used in the preparation of financial statements would more appropriately be addressed in accounting and financial reporting standards rather than the auditing literature. Because the GAAP hierarchy currently resides in the professional auditing literature it is directed to the auditor rather than the governmental entities themselves. The GAAP hierarchy currently is contained in the American Institute of Certified Public Accountants’ (AICPA) professional auditing literature in Statement of Auditing Standards (SAS) No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.īackground: Representatives of the AICPA have stated that they would like the standards setters to consider adopting standards for accounting and financial reporting issues (including the GAAP hierarchy) that now only reside in the SASs. Project Description: This project will incorporate into the GASB’s authoritative literature the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of state and local governmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). GASB Issues an Exposure Draft, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments.55, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, was approved in March 2009. The GAAP hierarchy currently is contained in the American Institute of Certified Public Accountants’ (AICPA) professional auditing literature in Statement of Auditing Standards (SAS) No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. Primary Objective:The objective of this project is to incorporate into the GASB’s authoritative literature the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of state and local governmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). Hierarchy of Generally Accepted Accounting Principles (GAAP Hierarchy)
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