Accounting has been around since the beginning of civilization. ¡§Accountants participated in the development of cities, trade, and the concepts of wealth and numbers.¡¨ (Giroux) The importance of accounting cannot be overemphasized. Equally important are the standards used to guild the application of accounting practice. Without principles and standards, financial reporting would not fairly present the financial position of a company. Accounting has changed and evolved vastly over time and continues to change. I will discuss the evolution and history of accounting, the Conceptual frame work of accounting, and the governing bodies which shape the standards and principles of accounting practice.
The beginning of civilization occurred
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Between 1939 and 1959, The CAP issued 51 accounting research bulletins. These bulletins dealt with problems as they arose and failed to address accounting principles. Because accounting principles were not addressed, the AICPA created a new standard setting body. In 1959, the Accounting Principles board was created to determine appropriate practices, establish accounting principles, and to reduce the inconsistencies in practice. The APB released APB opinions, which were based on research studies. The mission of the APB was to develop an overall conceptual framework. It issued 31 opinions and was dissolved in 1973 for lack of productivity and failure to act promptly. In 1971, many feared that the government would step in to regulate the profession. Because of that fear, a study group on accounting principles was formed. This group was referred to as the Wheat Committee.
The Wheat Committee was named after its chair, Francis Wheat. The committee was instructed to examine the organization and operation of the APB. They were looking for a way to get better results. In 1972, the Wheat Committee submitted their findings to the AICPA. This group determined that the APB must be dissolved and a new standard-setting structure be created. This structure is composed of three organizations: the Financial Accounting Foundation (it selects members of the FASB and funds and oversees their activities), Financial Accounting