Introduction
When working as an accountant, it is necessary to correctly use the established accounting principles for governmental and non-governmental organizations, referring to authoritative and non-authoritative sources. These principles are significant for researching and addressing a variety of state, as well as local, financial accounting issues (Ruppel, 2015). The purpose of this paper is to use the governmental GAAP hierarchy for ranking the guidance to address the issues.
Issue 1
To resolve the first problem, it is necessary to start by researching GASB Interpretation as the most authoritative standard. The second step is consulting GASB Technical Bulletin, and then, it is necessary to use FASB Statement (or FASB Concept Statement) if no information related to the problem was found (Granof, Khumawala, Calabrese, & Smith, 2016). The final step to complete is referring to a governmental accounting textbook.
Issue 2
When resolving the second issue, the first step is consulting AICPA Industry Audit and Accounting Guides. The next step is the reference to AICPA Practice Bulletins that are applicable specifically to state and local governments. If the required information is absent in these sources, it is possible to refer to a widely recognized industry practice (Ruppel, 2015). The final reference should be made to AICPA Issues Papers.
Issue 3
The key standard for addressing governmental financial accounting issues is the GASB Statement that should be consulted at the beginning of the research. The second source to use is AIPCA Statements of Position. In the case when the needed information is not found, it is possible to use Questions and Answers that are published by the GASB (Flood, 2015; Ruppel, 2015). The fourth step is the reference to International Accounting Standards Committee Statements.
Issue 4
If the issue is related to the state or local government area, the application of the FASB Statement is not appropriate, and only the use of FASB pronouncements is possible in this case. Therefore, research needs to be started by consulting the position statement of the GASB Emerging Issues Task Force (Flood, 2015; Granof et al., 2016). Then, it is necessary to refer to a leading accounting textbook. The final step is the reference to an article published in a leading audit journal.
Issue 5
GASB Technical Bulletin and FASB Technical Bulletin have the same level of authority, but they are applicable to different types of organizations. If the issue under analysis is related to the governmental organization, GASB Technical Bulletin is prioritized. In this case, FASB Technical Bulletin is not applicable, but it can be consulted after searching all standards that are directly related to governmental organizations (Flood, 2015). Thus, the second step is the work with GASB Concept Statement to retrieve useful information (Ruppel, 2015). The next step is the review of the speech made by a leading accounting professor in order to find possible answers to the questions related to the issue.
Conclusion
Following the GAAP hierarchy, accountants can rank available sources for resolving issues according to their relevance and authority. Thus, those statements that are appropriate to be used when working for governmental organizations are not applicable to for-profit organizations. Therefore, it is necessary to understand the difference between these accounting standards. In this paper, standards and accounting principles proposed for each issue have been ranked according to their appropriateness to be used in a concrete case.
References
Flood, J. M. (2015). Wiley GAAP 2015: Interpretation and application of generally accepted accounting principles. New York, NY: John Wiley & Sons.
Granof, M. H., Khumawala, S. B., Calabrese, T. D., & Smith, D. L. (2016). Government and not-for-profit accounting: Concepts and practices (7th ed.). New York, NY: John Wiley & Sons.
Ruppel, W. (2015). Wiley GAAP for Governments 2015: Interpretation and application of generally accepted accounting principles for state and local governments. New York, NY: John Wiley & Sons.