“Accounting is the means by which information about an enterprise is communicated and, thus, is sometimes called the language of business. Many different users have need for accounting information in order to make important decisions. These users include investors, creditors, management, governmental agencies, labor unions, and others. Because the primary role of accounting information is to provide useful information for decision-making purposes, it is sometimes referred to as a means to an end, with the end being the decision that is helped by the availability of accounting information. Thus with the help of accounting the organization achieves this purpose to provide information to the stakeholder of the organization. These stakeholders then make important decisions relating to the organizations. Thus governing body is required to regulate the accounting profession and the standards. It will help in providing fair, objective and transparent dissemination of accounting data by the organizations”. (Accounting, 2006).
The important government agencies are the American Institute of Certified Public Accountants (AICPA), the Security and Exchange Commission (SEC), the Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), and finally the International Accounting Standards Committee (IASC). Each of these agencies, in their own ways, help to address issues that affect businesses and governments in today’s changing society. FASB is one of the important bodies. This is because “The mission of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information” (FASB, 2006) ...