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Accounting standards

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1. Accounting standards could be established using descriptive theory, which explains practice, or normative theory, which leads practice. Which theory is currently being used in setting standards? Which do you think should be used? Justify your response.

2. Accounting standards are very complex and require expertise in their interpretation and application. Smaller companies often do not have the resources available to obtain this expertise, leading to the concept of "big GAAP" and "little GAAP" whereby there would be two sets of standards: one for large, publicly traded companies and another for smaller companies. Should there be two sets of accounting standards? Why or why not?

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1. Accounting standards could be established using descriptive theory, which explains practice, or normative theory, which leads practice. Which theory is currently being used in setting standards? Which do you think should be used? Justify your response.
Accounting standards could be established using descriptive theory which explains practice. It is because of the insistence on descriptive theory that the Generally Accepted Accounting Principles were developed. The result is that they are developed bit by bit and there were inconsistencies as they were incapable of handling unusual economic events.

Currently, the movement towards principles based standards is an attempt to create a framework. This is the normative method of theory creation and development. The basic premise for this current framework is that user ...

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International Accounting Standards

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Provide a brief history or discussion of the IASB, making sure to include the following additional facts:
1. The role of the IASC Foundation
2. Structure of the IASB
3. Number of accounting standards currently published
4. Explanation of the steps involved in creating an international accounting standard in accordance with due process

Also, briefly summarize the two most recent accounting standards issued by the ISAB.

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