Question 10Q - Intermediate Accounting (Kieso)

Question

For what purposes did the AICPA create the Accounting Principles Board?

Step-by-Step Solution

Answer

The Accounting Principles Board (APB) was established by the American Institute of Certified Public Accountants (AICPA) in 1959 as an administrative body for the purpose of issuing rules and standards on accounting principles. It also laid the foundation of Generally Accepted Accounting Principles (GAAP).

Meaning of AICPA

The AICPA, also known as the American Institute of Certified Public Accountants (AICPA), is a voluntary organization constituting Certified Public Accountants (CPA) in the United States.

Purposes for creating the Accounting Principles Board

American Institute of Certified Public Accountants (AICPA) created the Accounting Principles Board (APB) for the purpose of:

• Promote the written statement of accounting principles.
• Ascertain the suitable practices.
• Reduce the irregularities and differences in practice.

For this purpose, they needed to develop a comprehensive conceptual framework to assist in resolving problems as they become evident and to considerably research individual issues before they issued the declaration on how to deal with them.