| Using the Internet to Research US Financial Accounting Standards previous page January 11, 2006 I. Introduction. The purpose of this article is to present the results of an Internet research project to determine the availability and accessibility of United States generally acceptable accounting principles (GAAP) on the Internet. The hoped-for-result of this Internet research project was to find that most, if not, all currently relevant US accounting standards (GAAP) are readily available on the Internet, and that they could be efficiently and effectively searched. Unfortunately, the hoped-for-result was not found. The rest of this article provides details on this research project and what was found. II. Description of Project. To try to determine the availability and accessibility of US accounting standards on the Internet, this project consisted of searching for US accounting standards that provide relevant, detailed guidance on three “accounting problems". These “accounting problems” are accounting entry decisions that an accountant might need to make that might not be easily and routinely made, and therefore the accountant could benefit by finding accounting standard guidance on the Internet. The three “accounting problems”, or accounting entry decisions that need to be made are: 1. When a manufacturing process is changed in a company, and manufacturing equipment is relocated as part of the process change, is the cost to relocate the equipment expensed or capitalized? 2. The company will be buying new software in the future. What about setting up a reserve account (as a liability account) for this future purchase? 3. The company is spending a lot of money to set up its website. Are these costs expensed or capitalized? This research project is not intended to provide, or suggest, definitive answers to the above “accounting problems”. These problems, rather, are for use as a tool, or method, to develop search terms related to specific situations. Then, with these search terms, representing real situations, searches could be conducted on the Internet for informative accounting standards related to the “accounting problems”. Out of these searches, an evaluation then could be made on how available and accessible are US accounting standards on the Internet. Websites with accounting standards and information related to these three “accounting problems” were found. And, information at these websites is useful in helping to make decisions on accounting entries related to the problems. Links to these websites, that contain the standards and information, are provided in section IV. Using the search terms related to these accounting problems, the Internet was searched for relevant accounting guidance on the problems. The next section provides and describes some important findings. III. Findings. This section highlights various “findings” that came out of this Internet research project to determine the Internet’s usefulness for researching US accounting standards. The findings are useful, at least for me, to better understand what one can expect and how one might best use the Internet to find needed accounting standards. The six “findings", starting with a background and then the finding, are: A. Finding No. 1. 1. Background. Prior to beginning this project, I knew that the Financial Accounting Standards Board (FASB)’s website is where the “highest authority” accounting standards are located. I had searched the FASB site several times. However, I had never intentionally and determinedly evaluated the search characteristics at the FASB site, although in my previous FASB searches, I was always disappointed. One goal of the project was to discover more on the “search capacities”, and the results at the FASB site, and the site’s usefulness as a search source of accounting standards information. 2. Finding. I found that the best way to search the FASB site is not by using the search system at the FASB site, but by using the Google search feature that allows you to go to a website, and once there, use the Google search technology, and the Google search “basics” to search the visited site. (To do this, go to Google Advanced Search, search the domain www.fasb.org, and then use the “search within results” feature to search only the FASB site, using Google search.) The difference in results (between using Google search on the FASB site and using the FASB site “search engine”) is, in my opinion, incredible. Using this “Google technique” opens up a lot of useful information at the FASB site, which is otherwise either impossible or difficult to find and use. I also found the same phenomenon exists for the American Institute of Certified Public Accountants (AICPA) and the Security and Exchange Commission (SEC)’s websites. Searching these sites (the FASB, AICPA, and SEC sites) is important because this is the best strategy, I think, to find accounting standards applicable to specific questions. And the strategy is to go to these sites and search the sites first, rather than using one of the major search engines to search the Internet. Finding No. 6, given below, provides more details on this suggested strategy. The use of the “Google Search” technique, described above, does not work at all sites. Apparently, there are barriers at some sites that can prevent Google access to pages at the site. This is the case for the AICPA-owned website, www.cpa2biz.com, which, unfortunately, happens to be where the AICPA has its GAAP-promulgated standards. B. Finding No 2. 1. Background. Prior to this project, I knew that not all US accounting standards are FASB standards, but that the American Institute of Certified Public Accountants has also issued accounting standards that are accepted as authoritative guidance. However, I did not have a good understanding of how accessible these AICPA-related standards are on the Internet. 2. Finding. To access the AICPA-promulgated GAAP accounting standards, you have to pay a fee. You have to “buy” the standard document or you have to take out a “subscription” to have continuing access to various “classes” of AICPA-generated standards (fees depend upon what and how many “classes” you want access to). Unfortunately, the FASB also prevents access to a lot of standard-related information at the FASB website, without paying a fee. At least, the important FASB Financial Accounting Standards can be downloaded from the FASB site without a fee. It seems to me that this “fee” system is a real hindrance and barrier in the use of the Internet for efficient and effective searching and researching of US accounting standards. Probably, the more efficient and effective an accountant can use the Internet to search and research the US accounting standards, without such hindrance and barriers, the more likely accounting mistakes will be reduced, and the better financial reporting will be. This might be one of the better ways to improve financial reporting – do away with this fee system. please click here to go to next page |