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The Evolution of U.S. GAAP: The Political Forces Behind Professional Standards (Part II)

Controversial Standards Trigger Special-Interest Lobbying

By Stephen A. Zeff

This article, the second of a two-part commentary about accounting standards setting, chronicles the rising importance of financial accounting standards in different sectors of the U.S. economy, which has led to increasing special-interest lobbying for accounting standards with characteristics compatible with the desired outcomes. Financial accounting standards affect the U.S. economy in many ways, both in the aggregate and in the distribution of income, wealth, and risk. This commentary captures many of the key issues that have preoccupied standards setters, and especially identifies the efforts of the Financial Accounting Standards Board to implement an asset-and-liability approach to recognition and a fair-value approach to measurement. Full Story

February 2005 Issue

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Features

Evolution of U.S. GAAP, Part 2

Helping Hands at Tax Season

International Standards on Financial Instruments

Tax Implications of a Partnership Interest

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Essentials

Publisher's Column

Perspectives

A Student Perspective on the IRS’s VITA Program

Many people are aware of the IRS’s Volunteer Income Tax Assistance program, commonly known as VITA. What they may not realize is the impact the VITA program has in bringing federal and state income tax benefits to people with low and moderate incomes. Many of the key participants are not experienced professionals but students developing their basic academic and social skills while improving the economic status of VITA clients. Full Story

CPAs’ Role in Reforming the Tax Code and Social Security

In last month’s Inaugural and State of the Union Addresses, President George W. Bush talked about domestic priorities for his second term, including reforms in both the tax system and Social Security. Focus on these areas of public policy is long overdue. Both our tax system and the Social Security program are widely viewed as being poorly thought out and overly subject to politics. Full Story

Using Cultural Audits to Assess Tone at the Top

HealthSouth Corporation, one of the nation’s largest providers of outpatient surgery, diagnostic imaging, and rehabilitation services, is also a recent inductee into what one financial writer calls the “Business Hall of Shame.” The SEC has filed a civil lawsuit against HealthSouth and its CEO, Richard Scrushy, claiming that since 1999 they committed “massive accounting fraud” by overstating earnings by $1.4 billion. Full Story

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