Relationship Between Accounting Principles Board And The...

Relationship History A brief history of the relationship between the Accounting Principles Board and the Financial Accounting Standards Board. Accounting Principles Board. In 1936 the American Institute of Accountants merged with the American Society of Certified Public Accountants, forming a larger organization later named the American Institute of Certified Public Accountants (AICPA). In 1936 the American Institute of Certified Public Accountants Committee on Accounting Procedure (CAP) was formed.(Schroeder Cathey, 2010, p. 6) 1959 The AICPA responded to the alleged shortcomings of the CAP by forming the Accounting Principles Board (APB). The objectives of this body were to advance the written expression of generally accepted accounting principles (GAAP), to narrow areas of difference in appropriate practice, and to in the method of establishing accounting principles (Schroeder Cathey, 2010, p. 7) By the late 1960s, criticism of the development of accounting principles again arose. This criticism ce ntered on the following factors: 1. The independence of the members of the Accounting Principles Board . The individuals serving on the board had full-time responsibilities elsewhere that might influence their views of certain issues. 2. The structure of the board. The largest eight public accounting firms were automatically awarded one member, and there were usually five or six other public accountants on the APB. 3. Response time. 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