American Institute of Certified Public Accountants (AICPA)
Definition
The American Institute of Certified Public Accountants (AICPA) is a professional organization representing certified public accountants (CPAs) in the United States. It sets ethical standards and auditing guidelines for the profession, as well as offers credentials and continuing education programs.
5 Must Know Facts For Your Next Test
- AICPA establishes Generally Accepted Accounting Principles (GAAP), which are critical for accrual accounting.
- It provides guidelines on recognizing revenue and expenses, ensuring consistency in financial reporting.
- AICPA's standards influence how companies record sales when they are earned, not necessarily when cash is received.
- The organization publishes the Code of Professional Conduct, which emphasizes accurate and honest financial reporting.
- AICPA's resources help companies comply with legal requirements related to financial disclosures.
Review Questions
- What role does AICPA play in setting accounting standards?
- How do AICPA guidelines affect a company's recognition of sales and expenses?
- Why is adherence to AICPA's Code of Professional Conduct important in financial reporting?
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Related terms
GAAP: Generally Accepted Accounting Principles are a collection of commonly-followed accounting rules and standards for financial reporting.
Revenue Recognition Principle: This principle dictates that revenue should be recognized when it is earned and realizable, regardless of when cash is received.
Expense Recognition Principle: Also known as the matching principle, this requires that expenses be matched with revenues in the period in which they are incurred to generate those revenues.
