Codification of GAAP:
According to the American Institute of Certified Public Accountants (AICPA), changes were recently made that affected the previous Financial Accounting Standards Board (FSBA) Statement No. 162. The new statement, FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, provides literature on how accounting professionals should interpret the hierarchy of GAAP. Codification of GAAP was established in order to aid accounting professionals in making ethical decisions when conducting auditing and accounting work and when presenting financial data.

The hierarchy of GAAP:
The hierarchy of accounting for GAAP is divided into four levels:

• Level A: FASB Statements, FASB Interpretations, SEC Rules and Interpretive Releases, Accounting Principles Board Opinions (Unless amended), Accounting Research Bulletins (Unless amended)
• Level B: FASB Technical Bulletins, AICPA Industry Audit Guides that have been reviewed by the FASB
• Level C: Accounting Standards Executive Committee (AcSEC) Practice Bulletins that have been reviewed by the FASB, Consensuses reached by the Emerging Issues Task Force (EITF)
• Level D: AICPA Accounting Interpretations (no longer issued), FASB Implementation Guides, Other widely recognized or prevalent accounting practices