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Emerging Issues Task Force (EITF) Definition
The Emerging Issues Task Force (EITF) is an institution established in 1984 by the Financial Accounting Standards Board (FASB) with the aim of assisting and improving financial reporting techniques.
A Little More on What is the Emerging Issues Task Force
The EITF is tasked to address the emerging issues within the domain of existing generally accepted accounting principles (GAAP). The main purpose of establishing the emerging issues task force was to minimize the use of the Financial Accounting Standards Board (FASB).
The emerging issues task force (EITF) consists of professional accountants, chief, CPA, member of FASB, members of the SEC and other members from the public and private sector who participate in meeting and deliberate the emerging issues. Chairman of Financial Reporting Executive Committee (FinRec) of the AICPA and Chairman of IASB can also attend the meeting organized by emerging issues task force (EITF). the Task Force is composed of many professional persons from different sectors who are well aware of emerging issues.
To address emerging issues, the EITF arranges public gatherings and participants are invited from different sectors to include private and public sectors (banks, financial institutions, Securities and Exchange Commission (SEC), and Federal Reserve Bank (FRB)) to identify and highlight the issues that need to be resolved. The EITF publishes the issue and informs FASB.
If the EITF fails to reach consensus on an emerging issue, the Federal Accounting Standard Board (FASB) is required to take appropriate measures. EITF reaches an approve consensus if no more than three members vote against the proposed issue. Once it is approved, it needs to be ratified by FASB.
References for Emerging Issues Task Force
Academic Research on Emerging Issues Task Force (EITF)
● Resolving financial reporting problems: An institutional analysis of the process, Mezias, S. J., & Scarselletta, M. (1994). Administrative Science Quarterly, 654-678. In this paper, the authors examine the decision process of a public policy task force that plays a role in establishing financial reporting standards to determine what affects the kinds of decisions made. The research carried out in this piece stands as a case study of how garbage can and institutional forces intersect to bring about change in the institutional environment of accounting.
● Measuring corporate environmental performance, Ilinitch, A. Y., Soderstrom, N. S., & Thomas, T. E. (1998). Journal of accounting and public policy, 17(4-5), 383-408. This study evaluates the different measures of environmental performance set up to combat environmental hazards, and the reaction of the public to these measures. In this paper, we use theoretical and empirical approaches to define corporate environmental performance and consider how well existing measures operationalize the construct.
● The determinants of the amount of information disclosed about corporate restructurings, Bens, D. A. (2002). Journal of Accounting Research, 40(1), 1-20. This paper examines the information voluntarily disclosed about corporate restructurings.
● Financial accounting standard setting as an institutionalized action field: constraints, opportunities and dilemmas, Fogarty, T. J. (1992). Journal of Accounting and Public Policy, 11(4), 331-355. Institutional theory suggests that organizational action should be understood as attempts to attain societal legitimacy and maintain credibility with external constituents. Applying this perspective to the Financial Accounting Standard Board enhances the appreciation of accounting regulation. This paper organizes such an application according to the central issues addressed by institutional theory.
● Accounting for emissions, Fornaro, J. M., Winkelman, K. A., & Glodstein, D. (2009). Journal of Accountancy, 208(1), 40. This article introduces practitioners to the fundamental accounting issues concerning emission of greenhouse gases (GHGs).
● The Challenges of Hedge Accounting: The Explosion of New Hedging Instruments Has Outpaced Accounting Guidance, Stewart, J. E. (1989). The Journal of Accountancy, 168(5), 48. This paper explores the concept, challenges, and the problems with hedging. It further goes on to show the importance of hedging and the need for hedge accounting.
● The diagnosis and resolution of emerging issues in corporate disclosure practices, Wallace, R. S. O., & Cooke, T. E. (1990). Accounting and Business Research, 20(78), 143-151. This paper calls the attention of the accounting profession in the UK to a central but neglected process in accounting regulation, i.e. emerging issue diagnosis (EID). A framework for discussing EID is presented in terms of three critical components: inputs, resolution characteristics and outputs.
● A note on value relevance of mark-to-market values of energy contracts under EITF Issue No. 98-10, Eng, L. L., Saudagaran, S., & Yoon, S. (2009). Journal of Accounting and Public Policy, 28(3), 251-261. This paper examines whether marked-to-market values of energy trading assets and liabilities of companies that enter into energy contracts are related to market value of equity.
● The relevance of reliability: An update on the FASB and IASB joint conceptual framework project, Heffes, E. M. (2005). Financial Executive, 21(10), 15-18.
● Securing organizational legitimacy: An experimental decision case examining the impact of environmental disclosures, Milne, M. J., & Patten, D. M. (2002). Accounting, Auditing & Accountability Journal, 15(3), 372-405. This paper explores the role that environmental disclosures might play in producing a legitimating effect on investors within the context of the chemical industry.
● Environmental disclosures in annual reports and 10Ks: An examination, Gamble, G. O., Hsu, K., Kite, D., & Radtke, R. R. (1995). Accounting Horizons, 9(3), 34. The major objective of this paper is to determine if the present information disclosed in annual reports and 10Ks related to environmental improvements is sufficient to satisfy the needs of stakeholders.