Financial Accounting Standards Board (FASB) is a non-profit organization based in Norwalk, Conn. The board was formed to replace the Accounting Principles Board in 1973. The importance of FASB to financial statements is that it establishes standards that help all organizational stakeholders to make informed investment decisions. Besides, the standards are designed to promote transparency in financial reporting within various organizations. FASB is of importance to Starbucks since, through its standards, it ensures that the firm reports accurate financial statements that identify areas that need improvements and enable the management to take early corrective actions.
Generally Accepted Accounting Principles (US GAAP)
It is perceived that FASB usually issues the Generally Accepted Accounting Principles (GAAP). Many refer to GAAP as generally accepted national standards, principles, and procedures. GAAP aims at helping U.S.-based companies, such as Starbucks, to record and report complete, consistent, and comparable financial statements. This role is to enable investors to extract some useful information from Starbucks’ financial statements.
American Institute of Certified Public Accountants (AICPA)
American Institute of Certified Public Accountants (AICPA) was founded under the name of the American Association of Public Accountants in 1887. It is recognized as a U.S. non-profit professional organization of certified public accountants. AICPA’s main objective is to set ethical standards for financial statement auditing and professional practice amongst the certified public accountants within for-profit and not-for-profit organizations. The standards help employees within various companies, such as Starbucks, to act ethically while in active professional practice.
International Accounting Standards Board (IASB)
The body is responsible for the development, publication, and interpretation of the international financial reporting standards to help organizations across the world in understanding how to record and report financial statements (Ram & Newberry, 2017). The board helps companies, such as Starbucks, in setting financial reporting standards that certainly would enable them to raise business capital from business investors across the world.
International Financial Reporting Standards (IFRS)
Many companies today use these standards in the preparation of their financial statements. IFRS is important to organizations, such as Starbucks, as it helps them to present their financial statements on the same basis as their competitors to enable comparisons easier. It also helps businesses to raise business capital from foreign countries.
Securities and Exchange Commission (SEC)
The Security and Exchange Commission (SEC) is a body established by the U.S government that oversees corporate takeovers and protects investors across the U.S. The body is of importance as it requires all organizations within the country to often disclose their financial statements to the general public to specify the types of services they offer and the volume of assets they manage (Johnston & Petacchi, 2017). The mentioned SEC requirements usually help Starbucks in the preparation of efficient and accurate financial statements.
Public Company Accounting Oversight Board (PCAOB)
Public Company Accounting Oversight Board (PCAOB) is a private-sector, non-profit organization that was created to oversee accounting professionals across the U.S. Besides, the board is responsible for registering public accounting firms and setting financial and accounting auditing standards to help organizations prepare and report accurate financial statements (Rand, 2019). PCAOB is of importance to Starbucks as it ensures that auditors and brokers-dealers are effectively carrying out their responsibilities on behalf of the organization’s investors.
An annual report is defined as an organization’s comprehensive report on its activities throughout a particular fiscal year. This report usually evaluates and assesses an organization’s operations and critiques a company’s view of the upcoming year, and its position is a particular market. It tends to highlight an organization’s financial statements, including its financial position and cash flow, among others. An annual report is of significance to Starbucks as it enables the company to disclose the assets it manages, financial statements, among other things, to the general public.
10-K, 10-Q, and 8-K
10-K is a report that SEC requires all organizations to fill once in a year. It provides detailed information that may help companies in the analysis of their future growth. 10-Q is a report that companies file quarterly in a year. 8-K is a report that SEC requires all companies to file to disclose major events that their stakeholders should know. 10-K, 10-Q, and 8-K help Starbucks to prepare its reports effectively according to the SEC requirements.
Johnston, R., & Petacchi, R. (2017). Regulatory oversight of financial reporting: Securities and Exchange Commission comment letters. Contemporary Accounting Research, 34(2), 1128-1155. https://doi.org/10.2139/ssrn.1291345
Ram, R., & Newberry, S. (2017). Agenda Entrance Complexity in International Accounting Standard Setting: The Case of IFRS for SMEs. Abacus, 53(4), 485–512. https://doi.org/10.1111/abac.12122
Rand, J. (2019). What’s happening at the Public Company Accounting Oversight Board. The CPA Journal, 89(2), 28-30. Retrieved from https://www.cpajournal.com/2019/03/04/whats-happening-at-the-public-company-accounting-oversight-board/