1. What are the primary advantages of having a Codification of generally accepted accounting principles?
2. What are the sources of pressure that change and influence the development of GAAP?
3. Some individuals have indicated that the FASB must be cognizant of the economic consequences of its pronouncements. What is meant by “economic consequences”? What dangers exist if politics play too much of a role in the development of GAAP?
4. If you were given complete authority in the matter, how would you propose that GAAP should be developed and enforced?
5. One writer recently noted that 99.4 percent of all companies prepare statements that are in accordance with GAAP. Why then is there such concern about fraudulent financial reporting?