The study of criminology Essay Example for Free

The study of criminology Essay Criminology is the scientific study of crime, criminals, criminal behavior, and the criminal justice system. In the United States, it is taught chiefly in departments of criminology and criminal justice of colleges and universities. Criminologists study factors related to crime. Research in criminology involves fields such as sociology, psychology, and psychiatry. Law enforcement greatly depends on criminology. Often, the best method of treating offenders and ways to prevent crime are determined by criminologists. There are different things to study in criminology. Most criminological research examines environmental conditions. Others concentrate on the connection between crime and biological factors such as brain structure and chemical imbalances. And others emphasize peoples emotions and motives. Some study the ways which individuals learn criminal behavior through association with people. Criminologists also study penology, which is the science of punishment and treatment of offenders. They try to make punishment more certain than ever, bringing people to trial quickly, imposing fair sentences, and providing adequate prisons. Criminologists use a wide variety of research techniques. Statistics are often used to study the crime rate and the characteristics of criminals. Criminologists find relationships between crime rates and certain physical or social conditions. For example, such studies may show that the crime rate increases when poverty and unemployment rise. Criminologists generally use statistics compiled by government agencies. Criminology is extremely important in determine numerous factors in trials. It played many important roles in the recent OJ Simpson murder trial. Criminologists also use statistics to learn about personality traits or social conditions that are more common among criminals than other people. Researchers usually compare a group of criminals with a group of non-criminals who are similar to the lawbreakers in most ways. Differences  between the two groups can be measured in this manner. Any personality trait or social condition that occurs more frequently among criminals maybe one of many causes of criminal behavior. Case studies is another technique criminologists use. In a case study, a criminologist examines all the personality traits and social conditions that affect one criminal. The researcher studies the persons family history, environment, physical condition, psychological state, and many other characteristics. All these details help determine how certain conditions produce criminal behavior in an individual. Some case studies are conducted on certain groups of criminals, such as rapists or juvenile gangs. A criminologist may use the results of a case history to work out a theory about the development of criminal behavior. Most criminologists have university training in criminal justice, sociology, psychology, psychiatry. or related areas. Requirements vary for a career, but most criminologists have a masters or doctors degree. Many of these experts conduct research and reach criminology at universities and colleges. Many social workers are employed in the general area of criminology. Parole and probation officers must have a knowledge of criminology. Personnel trained in criminology also work in crime prevention programs and in the treatment of offenders. Lawyers, judges, and prison superintendents also should have some knowledge of criminology. In the United States, the major professional organization for criminologists is the American Society of Criminology, which was founded in 1941.

Ethnic groups were portrayed in the media Essay Example for Free

Ethnic groups were portrayed in the media Essay During the course of looking at education, and ethnicity issues I became interested in how ethnic groups were portrayed in the media. Although I havent studied this before, I wanted to do something different, but still apply the fundamental theories which I have studied. I have noticed how there seems to be a trend with all areas involving ethnicity, and personally feel there is racism and under-representation of ethnic groups on television, and definitely inequalities in the press. The media has a huge effect on our perception of life and self-concepts, and reinforce stereotypical ideals, and it seems that ethnic minorities tend to be characterised as uneducated, illiterate and bad role-models. Therefore the aim of this research is to see how people feel about the way the media represents all ethnic groups, and whether they think they are stereotypical. My first concept is the cultural effects model which sees the media as a very powerful influence, but also sees it as very diverse, and one type of audiences response may vary to another. However, there is an anticipated response, known as the preferred reading. Those who lack experience in cultural diversity are more likely to accept what is shown and therefore make generalisations from what they see to what they think. Therefore we make generalisations or stereotypical views of different members of society. This is my second concept. A stereotype is a conventional image of a person or group. Stereotypes generally conform to a pattern of dress or behaviour. A BBC news article entitled How entertainment changed: the media and multicultural Britain addressing how the media has changed over time and gives statistics from a recent survey to the public, to their (ethnic minorities) opinions on how they are represented in the media, and also how the overall public view the medias representations. The results were promising inasmuch as the public suggested there was improvement. However, there is apparently, still a lingering feeling that Britain has a long way to go before its multiculturalism is represented properly and effectively in the media. This is relevant to the point of research since it discusses how society is responding to what the media is involving, and if it is improving or not. Since there is such a dynamic response, it suggests that stereotypes do exist, and that there has been negative representation of ethnic groups. It also gives evidence to suggest that this representation has caused a problem it has effected audience perception of sub-cultures in society. We come to expect certain behaviour or values without looking at the bigger picture, through which the media tends to overlook. The third concept is racism. The belief that race accounts for differences in human character or ability and that a particular race is superior to others is racism. The contextual research included in this is; Racism and the press by Van Dijk in 1991. Here he analyses the reporting of ethnic issues in 1985 1989, in which the press, (especially the tabloids) portrayed black people as a problem and a threat to mainstream society. The collected findings of both pieces of research generally give a depressing reading. Under-representation and stereotypical characterisation within entertainment genres and negative, problem-orientated portrayal within factuality and news forms, and a tendency to ignore structural inequalities are recurring research findings when looking into the media.

Major Ingredient Groups, Specifications Supplier Review

Major Ingredient Groups, Specifications Supplier Review Karl Chamberlain Introduction The quality, consistency and safety of ingredients are a key factor in the success of any food manufacturing business. Due to this, it is vital that the ingredients and suppliers used by the business are carefully chosen and any problems with raw materials are addressed promptly. The major ingredient groups utilised within the UK Food Manufacturing sector There a seven ingredient groups which are utilised within the food manufacturing sector in the United Kingdom. The first of these groups is vegetables. Vegetables are foods that have originated from a plant and are eaten in savoury dish. While most vegetables can be eaten raw, they are often cooked prior to eating to make them softer and more edible. Some common examples of vegetables are potatoes, carrots and lettuce. Another ingredient group used within the UK food-manufacturing sector is fruits. A fruit is a part of a flower, specifically the matured or enlarged ovary of the flower and any parts or seeds that are attached to it. There are hundreds of edible fruits, with thousands of different varieties of each one, and each fruit has its own distinct taste. Some examples of fruits are apples, pears, oranges and strawberries. A further ingredient group that is used is cereal crops. Cereals are the grain or seeds from grasses, they have a high nutrient content as they are made to store nutrients for the grass that would have grown from the seed. Common examples of cereal crops are wheat, oats, maize, rye, barley and rice. Meats are another ingredient group that is used within food manufacture within the U.K. Lea meats are the flesh or muscular tissue of animals. Meats are a protein rich food and will generally be cooked prior to eating. Offal is another type of meat that is the internal organs of the animal such as the kidneys or liver. Often meat is processed, particularly parts of the animal that cannot be sold as lean meat, and made into other products such as sausages and burgers. Fish is also recognised as being a part of the meat ingredient group. Moreover, another ingredient group is the dairy group. Dairy products are any products that are made from the milk of animals, traditionally from cows or goats. The dairy ingredient group includes milk, cream, yoghurt and cheese. Milk products contain most of the essential nutrients needed for humans, although they typically contain high levels of fat. Herbs and spices are often regarded as being part of the same ingredient group although they are actually two separate groups. A herb is a plant which stem is not made from woody tissue. In food, often the fresh or dried leaves of the plant are used to flavour the food, with common examples being thyme and rosemary. Spices are also used to add flavour to a food product but they are made from parts of ‘dry’ plants such as the seeds, fruit or bark. Common examples of spices include mustard and cinnamon. Spices and herbs generally do not add any nutritional content to the product. The appropriate content of ingredient specifications Ingredient specifications are essential as they ensure that the products manufacturers receive from their suppliers are consistent the same and as a reference should any issues be found with the ingredient. A good ingredient specification will include a variety of information including supplier information, product information, ingredient details, packaging details, quality assurance standards and microbiological standards. The supplier information included in the specification should include contact details (including emergency contact details) for the supplier (and from the manufacturer if the supplier has not manufactured the product). The specification should also include the sites EEC number for meat, poultry and fish. The product information should include a description of the product, including individual and unit size, labelling and coding details, details of traceability information used (such as batch number or job number), correct storage conditions and details of product shelf life. It should also include details of any allergens that the ingredient contains. The ingredient information included in the specification should include information about any ingredients used in the product including quantities, supplier, county of origin and specification. This is to ensure that should any issues be found with the product, it can be traced back to the supplier of each ingredient used in it. Packaging standards are a further thing that should be included on a good ingredient specification. This should include both initial packaging as well as any secondary packaging such as baskets, pallet containers etc. Details of the type, size, material, type of seal and colour should be included. This ensures that the ingredient is consistently supplied in the same type of packaging which prevents any issues further down the line such as an ingredient coming in on a pallet without pallet layers on a site that does not allow this. The raw material specification should also include information about the quality assurance standards for the ingredient. This will include targets and what is and is not acceptable on things such as flavour, texture, visual, defects, foreign bodies and chemical analysis. It should also include details of the HACCP system in place at the supplier. Should any issues be found with the ingredient, having information on the quality assurance standards for the ingredient will provide something to refer to when checking if the suppliers tolerances are being met. A final thing which should be included in an ingredient specification are details of microbiological standards for the product including details of types of analysis carried out, frequency, what it is tested for and what the targets and limits for the ingredient are. The processes and practices typically involved in a Food Manufacturing operation with regard to â€Å"Ingredient Supplier Approval† Supplier approval is vital to any food business in order to ensure that any new ingredients used in their products are safe and of consistently good quality. The supplier approval process will begin with a development chef, or possibly a member of purchasing if the new ingredient is replacing a previous one, sourcing a new ingredient. Once the ingredient has been sourced, a risk assessment must be carried out for it. This should focus on the physical properties and nutritional aspects of the ingredient and any issues that may be caused by these, such as trapped foreign bodies inside lettuce heads. For many ingredients, particularly ones that have been processed, it is advisable to look at a full HACCP based assessment to determine any further risks that the particular ingredient may pose. This will allow the buyer to decide whether the product is safe to use or if any acceptable limits need to be set on contamination. Next, the supplier of the ingredient must be evaluated. This often starts with a questionnaire that is sent to a supplier. Ideally, this should ask if the company has a HACCP system in place, external accreditation such as BRC, what the GMP procedures are, internal auditing systems used and traceability systems in place. The supplier will then be scored against the answers given. While completing this questionnaire with a high score is not always enough to approve the supplier, a supplier with a particularly low score, especially the food safety questions, should not be approved. The next stage in the supplier approval process is to send a member of the technical or quality assurance team to the supplier to verify the processes and documentation discussed in the questionnaire. This stage may be unnecessary for some suppliers that are already audited by recognised external auditors or if the supplier already supplies the company with another product. The above stages should give the purchasing and technical teams enough information on the ingredient and supplier to decide whether to accept or reject them. Once all of the stages of the process have been carried out the supplier and purchasing company should sign off on the supplier’s status as an approved supplier. The company should keep a database of current approved suppliers, including details of any audits carried out and any issues that have occurred with the suppliers ingredients. Techniques used by Food Manufacturers for the ongoing assessment of ingredient supply Once a supplier is approved, both the supplier and its ingredients must be assessed from time to time to ensure that the ingredients they supply are of a consistently good safe standard. There are a number of techniques that can be used to do this. Firstly, the incoming ingredients should be inspected on delivery. A certificate of analysis should be sent along with the incoming product. These certificates should be checked to ensure that the product meets the required standards. The ingredients themselves should be checked by intake staff to ensure that they are visually acceptable, at the correct temperature and no signs of foreign body or pest contamination are present. Samples of the raw material should also be taken and sent for laboratory testing to â€Å"determine the presence or amounts of chemical, biological or physical contaminants†. A further technique used for the ongoing assessment of ingredient supply is regular supplier audits. A supplier audit involves a member of the company, usually from the technical team, going to visit the site at set intervals. There are a number of things that the supplier audit should check for. Firstly, it should confirm that the site has a written food safety system in place that includes procedures and a preventative system such as a HACCP system. Foreign body and allergen controls should also be looked at, as well as the results of any third party audits. The audit of the supplier should also check the basics of the operation are being done correctly. This could include a well maintained site and equipment which allows for proper cleaning, effective pest control, effective chemical control and a good standard of staff training (especially in food safety). The supplier’s quality program should be checked during a suppler audit to ensure that there are systems in place to test the quality of finished products; this could be done by microbiological sampling, taste panels or a variety of other methods. Furthermore the supplier audit should also be used to check that the suppliers management structure encourage food safety, as a site whose management does not promote food safety will likely cause problems for its customers. A further technique that can be used to assess the ongoing quality of ingredient supply is to raise a non-conformance or corrective action request should an ingredient not meet the specifications set out. When an ingredient deviates from the spec information should be sent to the supplier with a request for an investigation to be carried out, along with details of corrective actions put in place to stop the issue reoccurring. Each time a supplier is given a non-conformance it should be recorded in a log so that it is possible to track any reoccurring issues or problem suppliers.

Economics Indicators :: essays papers

Economics Indicators Investments The Stock-Trak investment simulation program began on August 30th, which marked the first day that trading was allowed. A total available amount of $300,000 was used for investing. The objective of this assignment is to maximize the value of the portfolio through November 19th, which was the last day of the trading period. I began the process of choosing specific investments for my portfolio by taking an asset allocation questionnaire (appendix I). Since the objective was to maximize portfolio value, I made sure for each question asked that I chose the answer with the most risk. My reasoning being that having my money in risky investments will on average lead to a greater return than investments with lower risk. The objective did not mention risk tolerance, and I wanted a portfolio composition with a good chance of earning exceptional returns. After completing the survey, I ended up with an aggressive asset allocation plan (appendix II). This stated that 85% of my money should b e invested in stocks, while the remaining 15% of my money should be invested in bonds. I had several basic strategies that I felt would lead to my portfolio having high returns. First I felt that it was important to invest early on in the trading period so that I would not miss any positive returns the market might yield (I was fully invested by September 10th). Secondly I wanted to buy all my investments and hold them because I believe that this strategy will best maximize returns. Timing the market I felt was lucky and too complicated. Finally I wanted to make sure that I bought at least 25 separate assets, so that I could be properly diversified. I used the Wall Street Journal to pick my individual stocks. My personal strategy was to pick stocks that were at or near their 52 week low in price. I felt that corporations, especially those that were well known, at or near their 52 week low in price would gain momentum. Furthermore I made sure that I was choosing companies that were i n diverse industries. I also included some international companies as well as some relatively smaller firms to add to my portfolio. My strategy on buying bonds was to buy four bonds that had different maturity dates, and came from different issuers such as corporate and government bonds.

Julius Caesar - Mark Antony :: essays research papers

Mark Antony The character of Mark Antony from Shakespeare’s play Julius Caesar may be viewed as simply the confident and devoted supporter of Julius Caesar. On the contrary, Antony presents the qualities of a shrewd flatterer, a ruthless tyrant, as well as a loyal follower. Antony’s characteristics will change as the play progresses. He will begin using flattery to get what he wants, but he will eventually depend on his powerful relentlessness. Furthermore, Antony uses these various attributes to make him successful. Throughout the play, Antony uses flattering to achieve his goals. Following the assassination of Caesar, Antony quickly grasps that he must deal with Brutus, and he has the shrewdness to take advantage of Brutus’s gullibility. Antony has his servant say, "Brutus is noble, wise, valiant, and honest" (III i 126). From this point, it is clear that Antony intends to flatter Brutus and to work upon those personal qualities of Brutus which represent his fundamental weaknesses. Antony then comes to the Capitol where he further flatters the conspirators by shaking their hands and saying, "Friends am I with you all, and love you all..." (III i 220). This act symbolizes that Antony has made a new friendship with the conspirators, but in reality, he is plotting to seek revenge so he can take over Rome. Antony is also able to flatter the vast angry crowd in order to get his way. He is first able to get the crowd to feel sorry for him. This feeling is evident when the second plebeian says, "Poor soul, his eyes are red as fire with weeping" (III ii 116). Antony is then able to turn the people in the crowd against Brutus by teasing them with Caesar’s will. Antony says, "And being men, hearing the will of Caesar, it will inflame you, it will make you mad" (III ii 144-145). This blandishment provokes an immediate response of the crowd demanding that Antony read Caesar’s will. Although Antony uses flattery to get what he wants, he will also show respect for others with his devotion and loyalty. One of the most significant characteristics of Mark Antony is his strong, affectionate loyalty to Julius Caesar. Antony’s devotion to Caesar extends beyond a simple friendship, but politically as well. This fact is best recognized when he offers Caesar the crown of Rome three times in the beginning of the play. This act shows that Antony is dedicated to Caesar because he is quite willing to serve under the rule of an ambitious tyrant. Immediately following the assassination of Caesar, Antony acts as though he Julius Caesar - Mark Antony :: essays research papers Mark Antony The character of Mark Antony from Shakespeare’s play Julius Caesar may be viewed as simply the confident and devoted supporter of Julius Caesar. On the contrary, Antony presents the qualities of a shrewd flatterer, a ruthless tyrant, as well as a loyal follower. Antony’s characteristics will change as the play progresses. He will begin using flattery to get what he wants, but he will eventually depend on his powerful relentlessness. Furthermore, Antony uses these various attributes to make him successful. Throughout the play, Antony uses flattering to achieve his goals. Following the assassination of Caesar, Antony quickly grasps that he must deal with Brutus, and he has the shrewdness to take advantage of Brutus’s gullibility. Antony has his servant say, "Brutus is noble, wise, valiant, and honest" (III i 126). From this point, it is clear that Antony intends to flatter Brutus and to work upon those personal qualities of Brutus which represent his fundamental weaknesses. Antony then comes to the Capitol where he further flatters the conspirators by shaking their hands and saying, "Friends am I with you all, and love you all..." (III i 220). This act symbolizes that Antony has made a new friendship with the conspirators, but in reality, he is plotting to seek revenge so he can take over Rome. Antony is also able to flatter the vast angry crowd in order to get his way. He is first able to get the crowd to feel sorry for him. This feeling is evident when the second plebeian says, "Poor soul, his eyes are red as fire with weeping" (III ii 116). Antony is then able to turn the people in the crowd against Brutus by teasing them with Caesar’s will. Antony says, "And being men, hearing the will of Caesar, it will inflame you, it will make you mad" (III ii 144-145). This blandishment provokes an immediate response of the crowd demanding that Antony read Caesar’s will. Although Antony uses flattery to get what he wants, he will also show respect for others with his devotion and loyalty. One of the most significant characteristics of Mark Antony is his strong, affectionate loyalty to Julius Caesar. Antony’s devotion to Caesar extends beyond a simple friendship, but politically as well. This fact is best recognized when he offers Caesar the crown of Rome three times in the beginning of the play. This act shows that Antony is dedicated to Caesar because he is quite willing to serve under the rule of an ambitious tyrant. Immediately following the assassination of Caesar, Antony acts as though he

Addicted to Coffee? Essay -- Biology Essays Research Papers

Addicted to Coffee? As a sophomore in college, I know how important it is to get that first cup of coffee in the morning. That first cup of coffee, second cup, and third cup seem vital to the well-being of Bryn Mawr students all over campus. They help us to stay awake through our classes, hours of study, and even time spent socializing. But is caffeine really addictive? Ask any Bryn Mawr student, and chances are that she will answer with an emphatic "Yes!" Ask any scientist or doctor the same question and the answer is likely to be just as emphatic, but what that answer will be is much less predictable. It is universally recognized that caffeine is a stimulant, a substance that causes the body to act differently from the ways that it would naturally act by inducing "fight or flight" reactions which cause the body to act in emergencies (1). However, it is still debated as to whether or not this stimulate is addictive. When deciding whether a substance is addictive, most professionals who make diagnoses in the United States and in many other countries will turn to the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, better know as the DMS-IV. This manual is published by the American Psychiatric Association and lists, among other things, the symptoms of all mental health disorders. According to the DMS-IV, the symptoms of substance dependence (in other words, substance addiction) are substance abuse, continuation of use despite related problems, increase in tolerance, and withdrawal symptoms (2). The debate lies largely in the interpretation of these symptoms. What exactly constitutes a withdrawal symptom? Can having a headache for a few days even compare to the horrors experienced by heroine addict... ...ww.umd.edu/news/?Diamondback/archives/2002/12/03/news3.html 6)ScienceDaily News Release: Debate Brews over Caffeine Addiction – Study Also Confirms Caffeine Improves Alertness And Energy, on ScienceDaily, an online magazine. http://www.sciencedaily.com/releases/1999/03/990322061015.htm 7)nucleus accumbens, a short description of the nucleus accumbens on the Department of Integrated Science and Technology section of the James Madison University website. http://www.isat.jmu.edu/users/klevicca/neuroconn/The_Brain/Brain_Function/Limbic_System/nucleusaccumbens.html 8)Caffeine Myths and Facts, on koffeekorner.com, a coffee appreciation website http://www.koffeekorner.com/health7.htm 9)Sleepy at work? How you can stay awake, tips for staying awake at work on MayoClinic.com. http://www.mayoclinic.com/invoke.cfm?objectid=91CC6E35-BD09-4A6B-BA577A3BED23885C

Chapter 1 Course Notes

Financial Accounting Theory and Analysis 10e Chapter 1 – The Development of Accounting Theory What is Theory? Webster defines theory as â€Å"Systematically organized knowledge, applicable in a relatively wide variety of circumstances; a system of assumptions, accepted principles and rules of procedure to analyze, predict or otherwise explain the nature of behavior of a specified set of phenomena. † Why is the development of a general theory of accounting important?The development of a general theory of accounting is because of the role accounting plays in our economic society. We live in a capitalistic society which is characterized by a self-regulated market that operates through the forces of supply and demand. What is the relationship of accounting research to accounting theory? The goal of accounting theory is to provide a set of principles and relationships that explains observed practices and predicts unobserved practices.That is, accounting theory should be able to explain why companies elect certain accounting methods over others and should enable users to predict the attributes of firms that elect various accounting methods. And as in other disciplines, accounting theory should also be verifiable through accounting research. Accounting research is needed to attain a more general theory of accounting, and in this regard the various theories of accounting that have been posited must be subjected to verification. The Early History of AccountingZenon Papyri * Accounting records have been found to date back several thousand years in various parts of the world. Discovered in 1915, the Zenon Papyri contained information Apollonius private estate for a period of about 30 years concerning construction projects, agricultural activities, and business operations during the 3rd century B. C. According to Hain, this â€Å"surprisingly elaborate accounting system† was used in Greece since the fi fth century B. C. â€Å"Zenon’s accounting system contained provisions for esponsibility accounting, a written record of all transactions, a personal account for wages paid to employees, inventory records, and a record of asset acquisitions and disposals. In addition, there is evidence that all the accounts were audited. † The Impact of the Renaissance * It wasn’t until approximately 1300-1500 the need arose for more accurate records due to the Italians merchants vigoursly pursing trade and commerce. Italian merchants borrowed Arabic numeral system and the basis of arithmetic and an evolving trend toward the present double entry book keeping system developed. In 1494 an Italian monk, Fra Luca Pacioli, wrote a book on arithmetic that included a description of double-entry bookkeeping. Pacioli’s work, Summa de Arithmetica Geometria Proportioniet Proportionalita, did not fully describe double-entry bookkeeping; rather, it formalized the practices and ideas that had been evolving over the years. Double-entry bookkeeping enabled business organizations to keep complete records of transactions and ultimately resulted in the ability to prepare financial statements. The evolution of joint ventures into ongoing businessesAs ongoing business organizations replaced isolated ventures, it became necessary to develop accounting records and reports that reflected a continuing investment of capital employed in various ways and to periodically summarize the results of activities. By the nineteenth century, bookkeeping expanded into accounting, and the concept that the owner’s original contribution, plus or minus profits or losses, indicated net worth emerged. However, profit was considered an increase in assets from any source, as the concepts of cost and income were yet to be developed.Another factor that influenced the development of accounting during the nineteenth century was the evolution in England of joint ventures into business corporations. Under the corporate form of business, owner s (stockholders) may not be management. Thus many individuals, external to the business itself, needed information about the corporation’s activities. Moreover, owners and prospective owners wanted to evaluate whether stockholder investments have yielded a return.As a consequence, the emerging existence of corporations created a need for periodic reporting as well as a need to distinguish between capital and income. The impact of the industrial revolution and the progressive movement The industrial revolution and the succession of the Companies Acts in England also increased the need for professional standards and accountants. In the later part of the nineteenth century, the industrial revolution arrived in the United States, bringing the need for more formal accounting procedures and standards. Railroads became a major economic influence.These companies created the need for supporting industries, which in turn led to increases in the market for corporate securities and an in creased need for trained accountants as the separation of the management and ownership functions became more distinct. The concept of capital maintenance The major concern of accounting during the early 1900s was the development of a theory that could cope with corporate abuses that were occurring at that time, and capital maintenance emerged as a concept. This concept evolved from maintaining invested capital intact to maintaining the physical productive capacity of the firm to maintaining real capital.In essence, this last view of capital maintenance was an extension of the economic concept of income (see Chapter 5) that there could be no increase in wealth unless the stockholder or the firm were better off at the end of the period than at the beginning. The accountant as a protector of business interests World War I changed the public’s attitude toward the business sector. Many people believed that the successful completion of the war could at least partially be attributed to the ingenuity of American business. As a consequence, the public perceived that business had reformed and that external regulation was no longer necessary.The accountant’s role changed from protector of third parties to protector of business interests. Critics of accounting practice during the 1920s suggested that accountants abdicated the stewardship role, placed too much emphasis on the needs of management, and permitted too much flexibility in financial reporting. During this time financial statements were viewed as the representations of management, and accountants did not have the ability to require businesses to use accounting principles they did not wish to employ. The result of this attitude is well known. In 1929 the stock market crashed and the Great Depression ensued.Although accountants were not initially blamed for these events, the possibility of governmental intervention in the corporate sector loomed. Accounting in the United States since 1930 Meetings bet ween NYSE and AIA One of the first attempts to improve accounting began shortly after the inception of the Great Depression with a series of meetings between representatives of the New York Stock Exchange (NYSE) and the American Institute of Accountants. The purpose of these meetings was to discuss problems pertaining to the interests of investors, the NYSE, and accountants in the preparation of external financial statements.The cooperative efforts between the members of the NYSE and the AIA were well received. However, the post-Depression atmosphere in the United States was characterized by regulation. There was even legislation introduced that would have required auditors to be licensed by the federal government after passing a civil service examination. AAA Similarly, in 1935 the American Association of University Instructors in Accounting changed its name to the American Accounting Association (AAA) and announced its intention to expand its activities in the research and develop ment of accounting principles and standards.The first result of these expanded activities was the publication, in 1936, of a brief report cautiously titled â€Å"A Tentative Statement of Accounting Principles Underlying Corporate Financial Statements. † The four-and-one-half-page document summarized the significant concepts underlying financial statements at that time. SEC (Securities And Exchange Commission) Two of the most important pieces of legislation passed at this time were the Securities Act of 1933 and the Securities Exchange Act of 1934, which established the Securities and Exchange Commission (SEC).The SEC was created to administer various securities acts. Under powers provided by Congress, the SEC was given the authority to prescribe accounting principles and reporting practices. Nevertheless, because the SEC has acted as an overseer and allowed the private sector to develop accounting principles, this authority has seldom been used. However, the SEC has exerted p ressure on the accounting profession and has been especially interested in narrowing areas of difference in accounting practice. * Securities Act of 1933A federal piece of legislation enacted as a result of the market crash of 1929. The legislation had two main goals: (1) to ensure more transparency in financial statements so investors can make informed decisions about investments, and (2) to establish laws against misrepresentation and fraudulent activities in the securities markets. * Securities Exchange Act of 1934 The Securities Exchange Act of 1934 was created to provide governance of securities transactions on the secondary market (after issue) and regulate the exchanges and broker-dealers in order to protect the investing public.Committee on Accounting Procedure The AICPA’s Committee on Accounting Procedure (CAP) was formed in 1936. The committee had authority to issue pronouncements on matters of accounting practice and procedure in order to establish generally accept ed practices. CAP was relatively inactive during its first two years, but became more active in response to the SEC’s release of ASR No. 4. One of the first responses was to expand CAP membership from 7 to 21. Major concerns were: * Use of the historical cost model of accounting.The then-accepted definition of assets as unamortized cost was seen by some critics as allowing management too much flexibility in deciding when to charge costs to expense. * The impact on inflation on reported profits. Lobbies were held by several companies in the 1940s for the use of replacement cost depreciation. Both CAP and the SEC rejected the efforts. This decade long debate didn’t until Congress passed legislation in 1954 amending the IRS Tax Code to allow accelerated depreciation. CAP works were originally published in the form of Accounting Research Bulletins (ARBs).The pronouncements did not dictate mandatory practice and received authority only from their general acceptance. The Acc ounting Research Bulletins were consolidated in 1953 into Accounting Terminology Bulletin No. 1, â€Å"Review and Resume† and ARB No 43 through 51 was published from 1953 until 1959. The recommendations of these bulletins that have not been superseded are contained in the FASB Accounting Standards Codifications. Accounting Principles Board By 1959 the methods of formulating accounting principles were being questioned as not arising from research or based on theory.The CAP was also criticized for acting in a piecemeal fashion and issuing standards that, in many cases, were inconsistent. Additionally, all of its members were part-time and as a result their independence was questioned. Finally, the fact that all of the CAP members were required to be AICPA members prevented many financial executives, investors, and academics from serving on the committee. As a result, accountants and financial statement users were calling for wider representation in the development of accounting principles.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 was quickly squelched when the first APB chairman, Weldon Powell, voiced his belief that accounting research was more applied and pure and that the usefulness of the end product was a major concern.The APB was composed of from seventeen to twenty-one members, who were selected primarily from the accounting profession but also included individuals from industry, government, and academia. Initially, the pronouncements of the APB, termed â€Å"opinions,† were not mandatory practice; however, the issuance of APB Opinion No. 2 (see FASB ASC 740-10-25 and 45) and a subsequent partial retraction contained in APB Opinion No. 4 (see FASB ASC 740-10-50) highlighted the need for standard-setting groups to have more authority. Financial Accounting Standards BoardDue to the growing criticism of the APB, in 1971 the board of directors of the AICPA appointed two committees. The Wheat Committee, chaired by Francis Wheat, was to study how financial accounting principles should be established. The Trueblood Committee, chaired by Robert Trueblood, was asked to determine the objectives of financial statements. The Wheat Committee issued its report in 1972 recommending that the APB be abolished and the Financial Accounting Standards Board (FASB) be created. In contrast to the APB, whose members were all from the AICPA, this new board was to comprise representatives from various organizations.The members of the FASB were also to be full-time paid employees, unlike the APB members, who served part-time and were not paid. the Accounting Principles Board Formation and structure The APB was composed of from seventeen to twenty-one members, who were selected primarily from the accounting profession but also included individuals from industry, government, and academia. Types of pronouncements * APB Opinions Initially, the pronouncements of the APB, termed â€Å"opinions,† were not mandatory practice; however, the issuance of APB Opinion No. 2 (see FASB ASC 740-10-25 and 45) and a subsequent partial retraction contained in APB Opinion No. (see FASB ASC 740-10-50) highlighted the need for standard-setting groups to have more authority. The flap over accounting for the investment tax Credit This controversy was over the proper method to use in accounting for the investment tax credit. In the early 1960s the country was suffering from the effects of a recession. After President John F. Kennedy took office, his advisors suggested an innovative fiscal economic policy that involved a direct income tax credit (as opposed to a tax deduction) based on a percentage of the cost of a qualified investment.Congress pas sed legislation creating the investment tax credit in 1961. The APB was then faced with deciding how companies should record and report the effects of the investment tax credit. It considered two alternative approaches: 1. The flow-through method, which treated the tax credit as a decrease in income tax expense in the year it occurred. 2. The deferred method, which treated the tax credit as a reduction in the cost of the asset and therefore was reflected over the life of the asset through Rule 203The lack of support for some of the APB’s pronouncements and concern over the formulation and acceptance of GAAP caused the Council of the AICPA to adopt Rule 203 of the Code of Professional Ethics. 10 This rule requires departures from accounting principles published in APB Opinions or Accounting Research Bulletins (or subsequently FASB Statements and now the FASB ASC) to be disclosed in footnotes to financial statements or in independent auditors’ reports when the effects of such departures are material.This action has had the effect of requiring companies and public accountants who deviate from authoritative pronouncements to justify such departures. Criticism of the APB 1. The independence of the members of the APB. 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 (at that time) were automatically awarded one member, and there were usually five or six other public accountants on the APB. 3. Response time.The emerging accounting problems were not being investigated and solved quickly enough by the part-time members. The financial Accounting Standards Board (FASB) The Wheat Committee The Wheat Committee, chaired by Francis Wheat, was to study how financial accounting principles should be established. The AICPA quickly adopted the Wheat Committee recommendations, and the FASB became the official body c harged with issuing accounting standards. The Trueblood Committee The Trueblood Committee, chaired by Robert Trueblood, was asked to determine the objectives of fi nancial statements.The FASB was established The Wheat Committee issued its report in 1972 recommending that the APB be abolished and the Financial Accounting Standards Board (FASB) be created. The structure of the FASB The structure of the FASB is as follows. A board of trustees nominated by organizations whose members have special knowledge and interest in financial reporting is selected. The organizations originally chosen to select the trustees were the American Accounting Association; the AICPA; the Financial Executives Institute; the National Association of Accountants (The NAA’s ame was later changed to Institute of Management Accountants in 1991), and the Financial Analysts Federation. In 1997 the board of trustees added four members from public interest organizations. The board that governs the FASB is the Financial Accounting Foundation (FAF). The FAF appoints the Financial Accounting Standards Advisory Council (FASAC), which advises the FASB on major policy issues, the selection of task forces, and the agenda of topics. The number of members on the FASAC varies from year to year. The bylaws call for at least twenty members to be appointed.However, the actual number of members has grown to about thirty in recent years to obtain representation from a wider group of interested parties. FASB Mission The FASB’s mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information. In attempting to accomplish this mission, the FASB seeks to: 1. Improve the usefulness of financial reporting by focusing on the primary characteristics of relevance and reliability and on the qualities of comparability and consistency 2.Keep standards current to reflect changes in methods of doing business and changes in the economic environment 3. Consider promptly any significant areas of deficiency in financial reporting that might be improved through the standard-setting process 4. Promote the international comparability of accounting standards concurrent with improving the quality of financial reporting 5. Improve the common understanding of the nature and purposes of information contained in financial reports Type of Pronouncements * Statements of Financial Accounting Concepts Statements of Financial Accounting Standards * Interpretations * Technical Bullentins Originally, the FASB issued two types of pronouncements, Statements of Financial Accounting Standards (SFASs) and Interpretations. Subsequently, the FASB established two new series of releases: (1) Statements of Financial Accounting Concepts (SFACs) and (2) Technical Bulletins. SFASs conveyed required accounting methods and procedures for specific accounting issues and officially created GAAP. In terpretations were modifications or extensions of issues pronouncements.SFACs are intended to establish the objectives and concepts that the FASB will use in developing standards of financial accounting and reporting. To date, the FASB has issued seven SFACs, which are discussed in depth in Chapters 2, 6, and 7. SFACs differed from Statements of Financial Accounting Standards in that they did not establish GAAP. Similarly, they are not intended to invoke Rule 203 of the Rules of Conduct of the Code of Professional Ethics. It is anticipated that the major beneficiary of these SFACs will be the FASB itself.However, knowledge of the objectives and concepts the board uses should enable financial statement users to better understand the content and limitations of financial accounting information. Technical Bulletins were strictly interpretive in nature and did not establish new standards or amend existing standards. They were intended to provide guidance on financial accounting and repor ting problems on a timely basis. Emerging Issues One of the fi rst criticisms of the FASB was for failing to provide timely guidance on emerging implementation and practice problems.During 1984 the FASB responded to this criticism by (1) establishing a task force, the Emerging Issues Task Force (EITF), to assist in identifying issues and problems that might require action; and (2) expanding the scope of the FASB Technical Bulletins in an effort to offer quicker guidance on a wider variety of issues. The EITF was formed in response to two confl icting issues. On the one hand, accountants are faced with a variety of issues that are not fully addressed in accounting pronouncements, such as interest rate swaps or new fi nancial instruments. These and other new issues need immediate resolution.On the other hand, many accountants maintain that the ever-increasing body of professional pronouncements has created a standards overload problem (discussed in more detail below). The FASB establi shed the EITF in an attempt to simultaneously address both issues. The goal of the EITF is to provide timely guidance on new issues while limiting the number of issues whose resolutions require formal pronouncements by the FASB. Standards Overload One of the fi rst criticisms of the FASB was for failing to provide timely guidance on emerging implementation and practice problems.During 1984 the FASB responded to this criticism by (1) establishing a task force, the Emerging Issues Task Force (EITF), to assist in identifying issues and problems that might require action; and (2) expanding the scope of the FASB Technical Bulletins in an effort to offer quicker guidance on a wider variety of issues. The EITF was formed in response to two confl icting issues. On the one hand, accountants are faced with a variety of issues that are not fully addressed in accounting pronouncements, such as interest rate swaps or new fi nancial instruments.These and other new issues need immediate resolution . On the other hand, many accountants maintain that the ever-increasing body of professional pronouncements has created a standards overload problem (discussed in more detail below). The FASB established the EITF in an attempt to simultaneously address both issues. The goal of the EITF is to provide timely guidance on new issues while limiting the number of issues whose resolutions require formal pronouncements by the FASB. Standard setting as a political processA highly infl uential academic accountant stated that accounting standards are as much a product of political action as they are of careful logic or empirical fi ndings. 15 This phenomenon exists because a variety of parties are interested in and affected by the development of accounting standards. Various users of accounting information have found that the best way to infl uence the formulation of accounting standards is to attempt to infl uence the standard setters. The CAP, APB, and FASB have all come under a great deal o f pressure to develop or amend standards so as to benefi t a particular user group.For example, the APB had originally intended to develop a comprehensive theory of accounting before attempting to solve any current problems; however, this approach was abandoned when it was determined that such an effort might take up to fi ve years and that the SEC would not wait that long before taking action. The Business Roundtable engaged in what initially was a successful effort (later reversed) to increase the required consensus for passage of a SFAS from a simple majority to fi ve of the seven members of the FASB.Congressional action was threatened over the FASB’s proposed elimination of the pooling of interest method of accounting for business combinations (see Chapter 16). Two of the most notable examples of the politicizing of accounting standards involved the issues of employee stock options and fair value accounting. Economic Consequences The increased pressure on the standard-set ting process is not surprising, considering that many accounting standards have signifi cant economic consequences. Economic consequences refers to the impact of accounting reports on various segments of our economic society.This concept holds that the accounting practices a company adopts affect its security price and value. Consequently, the choice of accounting methods infl uences decision making rather than just refl ecting the results of these decisions. Consider the release of the FASB’s pronouncement on other postretirement benefi ts (OPRBs) FASB Statement No. 106, â€Å"Other Post Retirement Benefi ts† (see FASB ASC 715-10-30, 60, and 80). The accounting guidelines for OPRBs required companies to change from a pay-as-you-go basis to an accrual basis for health care and other benefi ts that companies provide to retirees and their dependents.The accrual basis requires companies to measure the obligation to provide future services and accrue these costs during the years employees provide service. This change in accounting caused a large increase in recorded expenses for many companies. Consequently, a number of companies simply ceased providing such benefi ts to their employees, at a large social cost. The impact on our economic society of accounting for OPRBs illustrates the need for the FASB to fully consider both the necessity to further develop sound reporting practices and the possible economic consequences of new codifi cation content.Accounting standard setting does not exist in a vacuum. It cannot be completely insulated from political pressures, nor can it avoid carefully evaluating the possible ramifi cations of standard setting. gaap Evolution of phrase: * Changed wording of auditor’s certificate brought about by meetings between NYSE and AIA One result of the meetings between the AICPA and members of the NYSE following the onset of the Great Depression was a revision in the wording of the certifi cate issued by CPAs. The o pinion paragraph formerly stated that the fi nancial statements had been examined and were accurate.The terminology was changed to say that the statements are â€Å"fairly presented in accordance with generally accepted accounting principles. † This expression is now interpreted as encompassing the conventions, rules, and procedures that are necessary to explain accepted accounting practice at a given time. Therefore fi nancial statements are fair only to the extent that the principles are fair and the statements comply with the principles. * The APB’s definition * The Auditing Standards Executive Committee’s definition The current sources of GAAP consist of four levels described as A, B, C, and D by Statement of Auditing Standards No 69 he business reporting research project Steering Committee Working Group the role of ethics in accounting Ethics are concerned with the types of behavior society considers right and wrong. Accounting ethics incorporate social sta ndards of behavior as well as behavioral standards that relate specifi cally to the profession. The environment of public accounting has become ethically complex. The accountants’ Code of Professional Ethics developed by the AICPA has evolved over time, and as business transactions have become more and more complex, ethical issues have also become more complex.Accounting in Crisis – the events of the early 2000s On January 1, 2001, Enron’s stock was selling for over $90 per share. From that time until the early summer of 2001, nineteen investment research fi rms reviewed its performance and twelve had given it a â€Å"strong buy† recommendation, while fi ve others had recommended it as â€Å"buy. †27 Additionally, the company’s 2000 annual report indicated that its auditor had not found any signifi cant accounting problems. However, on August 14, 2001, it was announced that the company’s president, Jeffery Skilling, had resigned after only six months on the job for â€Å"purely personal reasons. Enron used what were termed special-purpose entities (SPEs) now termed variable interest entities (VIEs) to access capital and hedge risk. 28 By using SPEs such as limited partnerships with outside parties, a company may be permitted to increase its fi nancial leverage and return on assets without reporting debt on its balance sheet. 29 The arrangement works as follows: An entity contributes fi xed assets and related debt to an SPE in exchange for an ownership interest.The SPE then borrows large sums of money from a fi nancial institution to purchase assets or conduct other business without the debt or assets showing up on the originating company’s fi nancial statements. The originating company can also sell leveraged assets to the SPE and record a profi t. At the time these transactions took place, the FASB required that only 3 percent of a SPE be owned by an outside investor. If this guideline is met, the SPE d idn’t need to be consolidated and the SPE’s debt was not disclosed on the originating company’s fi nancial statements.Enron used SPEs to new degrees of complexity and sophistication, capitalizing them with not only a variety of fi xed assets and liabilities but also extremely complex derivative fi nancial instruments, its own restricted stock, rights to acquire its stock, and related liabilities. Additionally, as Enron’s fi nancial dealings became more complicated, the company apparently also transferred troubled assets that were falling in value, such as certain overseas energy facilities, its broadband operation, or stock in companies that had been spun off to the SPEs. As a consequence, the losses on these assets were kept off Enron’s books.To compensate partnership investors for assuming downside risk, Enron promised to issue additional shares of its stock. As the value of the assets in these partnerships fell, Enron began to incur larger and l arger obligations to issue its own stock farther down the road. The problem was later compounded as the value of Enron’s stock declined. On October 16, 2001, the company reported a third-quarter loss and its stock dropped to about $33 a share. On October 28, as some of the problems with the SPEs were made public, a special committee of the board of directors of Enron was established under the chairmanship of William C.Powers, dean of the University of Texas Law School. The Powers Committee Report concluded that some Enron employees were directly involved in the SPEs and were enriched by tens of millions of dollars they never should have received. The committee also found that many of the transactions were designed to achieve favorable fi nancial statement results and were not based on legitimate economic objectives or to transfer risk. International Accounting standards A truly global economy emerged during the 1990s, as many U. S. companies generated signifi cant amounts of revenue and profi ts in foreign markets.Multinational companies are faced with decisions on the allocation of resources to their most effi cient uses. These allocations cannot be accomplished without accurate and reliable fi nancial information. Companies seeking capital or investment opportunities across national boundaries face cost and time issues. Capitalseeking fi rms must reconcile their fi nancial statements to the accounting rules of the nation in which they are seeking capital, and investors must identify foreign reporting differences. The increasingly global economy requires that this process be simplifi ed.Thus there is a push to harmonize international accounting standards. The IASB is an independent private sector body that was formed in 1973 to achieve this purpose. Its objectives are 1. To formulate and publish in the public interest accounting standards to be observed in the presentation of fi nancial statements and to promote their worldwide acceptance and observanc e 2. To work generally for the improvement and harmonization of regulations, accounting standards, and procedures relating to the presentation of fi nancial statements33These objectives have resulted in attempts to coordinate and harmonize the activities of the many countries and agencies engaged in setting accounting standards. The IASB standards also provide a useful starting point for developing countries wishing to establish accounting standards. 34 The IASB has also developed a conceptual framework titled the Framework for the Preparation and Presentation of Financial Statements. 35 The conclusions articulated in this release are similar to those contained in the FASB’s Conceptual Framework Project.That is, the objective of fi nancial statements is to provide useful information to a wide range of users for decision-making purposes. The information provided should contain the qualitative characteristics of relevance, reliability, comparability, and understandability. At t he time this book was published, the IASB had issued forty-one Statements of Accounting Standards (IASs) and ten Statements of Financial Reporting Standards (IFRSs). However, since it has no enforcement authority, the IASB must rely on the â€Å"best endeavors† of its members.Neither the FASB nor the SEC is a member of the IASB, so its standards have no authority in the United States at the present time. However, the SEC recently ruled that foreign companies that adopt IASB standards are eligible to list their securities for sale on U. S. stock exchanges (see Chapter 3 for a further discussion of this issue). As noted in Chapters 2 and 3, there is also a movement to have IASB standards become GAAP for U. S. companies. The emergence of multinational corporations has resulted in a need for the increased harmonization of worldwide accounting standards.The role of the IASB is discussed in more detail in Chapter 3, and the IASB standards are reviewed throughout this text in chapte rs dealing with the issues addressed by each IAS or IFRS. Cases †¢ Case 1-1 Sources of GAAP The FASB ASC is now the sole authoritative source for all U. S. GAAP. a. What are the major goals of the FASB ASC? b. How is the FASB ASC expected to improve the practice of accounting? c. What literature is now contained in the FASB ASC? d. What should an accountant do if the guidance for a particular transaction or event is not specifi ed within the FASB ASC? †¢ Case 1-2 Accounting EthicsWhen the FASB issues new standards, the implementation date is frequently 12 months from date of issuance, and early implementation is encouraged. Becky Hoger, controller, discusses with her fi nancial vice president the need for early implementation of a standard that would result in a fairer presentation of the company’s fi nancial condition and earnings. When the fi nancial vice president determines that early implementation of the standard will adversely affect the reported net income f or the year, he discourages Hoger from implementing the standard until it is required. Required: a. What, if any, ethical issue is involved in this case? . Is the fi nancial vice president acting improperly or immorally? c. What does Hoger have to gain by advocacy of early implementation? d. Who might be affected by the decision against early implementation? (CMA adapted) †¢ Case 1-3 Politicalization of Accounting Standards Some accountants have said that politicalization in the development and acceptance of generally accepted accounting principles (i. e. , standard setting) is taking place. Some use the term politicalization in a narrow sense to mean the infl uence by governmental agencies, particularly the SEC, on the development of generally accepted accounting principles.Others use it more broadly to mean the compromising that takes place in bodies responsible for developing these principles because of the infl uence and pressure of interested groups (SEC, American Accounti ng Association, businesses through their various organizations, Institute of Management Accountants, fi nancial analysts, bankers, lawyers, etc. ). Required: a. The Committee on Accounting Procedure of the AICPA was established in the mid- to late 1930s and functioned until 1959, at which time the Accounting Principles Board came into existence.In 1973, the Financial Accounting Standards Board was formed, and the APB went out of existence. Do the reasons these groups were formed, their methods of operation while in existence, and the reasons for the demise of the fi rst two indicate an increasing politicalization (as the term is used in the broad sense) of accounting standard setting? Explain your answer by indicating how the CAP, APB, and FASB operated or operate. Cite specifi c developments that tend to support your answer. b. What arguments can be raised to support the politicalization of accounting standard setting? . What arguments can be raised against the politicalization of accounting standard setting? (CMA adapted) †¢ Case 1-4 Generally Accepted Accounting Principles At the completion of the Darby Department Store audit, the president asks about the meaning of the phrase â€Å"in conformity with generally accepted accounting principles,† which appears in your audit report on the management’s fi nancial statements. He observes that the meaning of the phrase must include more than what he thinks of as â€Å"principles. † Required: a.Explain the meaning of the term accounting principles as used in the audit report. (Do not in this part discuss the signifi cance of â€Å"generally accepted. †) b. The president wants to know how you determine whether or not an accounting principle is generally accepted. Discuss the sources of evidence for determining whether an accounting principle has substantial authoritative support. c. The president believes that diversity in accounting practice will always exist among independent entit ies despite continual improvements in comparability.Discuss the arguments that support his belief. †¢ Case 1-5 The Evolution of the Accounting Profession The nineteenth century witnessed the evolution of joint ventures into business corporations. Required: Discuss how the emergence and growth of the corporate form of business affected perceptions regarding the role of the accounting profession in fi nancial reporting in England and the United States. †¢ Case 1-6 Accounting in Crisis During the early 2000s, the role of accounting and the auditing profession changed and several accounting scandals were uncovered. Required: a.What conditions caused accounting and the auditing profession role to change during this time? b. What major changes occurred as a result of the accounting scandals at that time? †¢ Case 1-7 The FASB The FASB is the offi cial body charged with issuing accounting standards. Required: a. Discuss the structure of the FASB. b. How are the Financial Acco unting Foundation members nominated? c. SFAC No. 2 describes a number of key characteristics or qualities for accounting information. Briefl y discuss the importance of any three of these qualities for fi nancial reporting purposes. CMA adapted) FASB ASC Research For each of the following research cases, search the FASB ASC database for information to address the issues. Cut and paste the FASB ASC paragraphs that support your responses. Then summarize briefl y what your responses are, citing the paragraphs used to support your responses. †¢ FASB ASC 1-1 Variable Interest Entities In this chapter, we discuss how Enron and other companies use Variable Interest Entities (VIEs) to keep the effects of transactions and events off corporate balance sheets. 1. How does the FASB defi ne a VIE?In other words, how does an entity qualify to be a VIE? 2. Is a company that meets the defi nition of a VIE required to consolidate the VIE? †¢ FASB ASC 1-2 Status of Accounting Research Bulle tins Portions of ARB No. 43 are still considered GAAP. Three of the most important issues covered in ARB No. 43 are revenue recognition, treasury stock, and comparative fi nancial statements. Find the appropriate sections of the FASB ASC, originally contained in ARB No. 43, that address these issues. Cite the sources and copy the relevant information. †¢ FASB ASC 1-3 Accounting for the Investment Tax CreditThe accounting alternative treatments for the investment tax credit originally outlined in APB Opinions 2 and 4 are still considered GAAP. Find and cite the FASB ASC paragraphs and copy the relevant information. †¢ FASB ASC 1-4 Securities and Exchange Commission Comments SEC observers frequently provide comments at EITF meetings. Find, cite, and copy the observer comments on: 1. Revenue recognition—customer payments and incentives 2. Debt with conversions and other options 3. Software cost of sales and services †¢ FASB ASC 1-5 Generally Accepted Accounting Pr ocedure GuidelinesFind the guidelines for determining GAAP in the FASB ASC. Room for Debate †¢ Debate 1-1 Which Body Should Set Accounting Standards in the United States? Team Debate Team 1: Argue that the SEC should set accounting standards in the United States. Team 2: Argue that the FASB should set accounting standards in the United States. †¢ Debate 1-2 Should the Scope of Accounting Standards Be Narrowed Further? Team Debate Team 1: Pretend you are management. Argue against the narrowing of accounting choices. Team 2: Pretend you are a prospective investor. Argue for the narrowing of accounting choices.