Us Gaap Accounting
Is Generally Accepted Accounting Principles (GAAP) LAW?
In the US, is it illegal if an accountant(s) did not follow one or more of the GAAP? Does SEC enforce the GAAP? What happens when an accountant doesn’t follow GAAP?
If the accountant was claiming to follow GAAP and was knowingly not what would happen?
GAAP is not law. And, it is close.
if a listed company does not follow GAAP and the reasons therefore do not fit within what their auditors believe is correct interpretation, the auditors may refuse to express an opinion on the statements, or may even express an adverse opinion.
Either would result in the exchange immediately suspending trading in the company’s securities until the issue is restored to normal condition.
SEC has enforcement powers, yes. they’re a bit cumbersome.
auditors can be sued by investors when the investors believe the company’s accounting was wrong and the auditors knew or should have known it was wrong. Enron’s auditors went bankrupt from the lawsuits, for example.
Video on the Convergence of Accounting Standards (US GAAP Vs. IFRS)
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Wiley GAAP 2010: Interpretation and Application of Generally Accepted Accounting Principles $53.41 The most practical, authoritative guide to GAAP Beginning July 1, 2009, the Financial Accounting Standards Board’s (FASB’s) Accounting Standards Codification (ASC) has superseded virtually all promulgated GAAP, replacing what had previously comprised four levels in the GAAP hierarchy with a single set of codified GAAP. The objective was to create a new, clearer indexing system that is much … |
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Wiley GAAP: Interpretation and Application of Generally Accepted Accounting Principles 2011 $69.30 The most practical, authoritative guide to GAAP Wiley GAAP 2011 contains complete coverage of all levels of GAAP, now indexed to the new ASC. Wiley GAAP renders GAAP more understandable and accessible for research, and has been designed to reduce the amount of time and effort needed to solve accounting research issues. Provides interpretive guidance and a wealth of real-world, conten… |
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