Fasb Essay

814 WordsFeb 28, 20124 Pages
The Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting and reporting. FASB is not a unit of the United States government. In 1973 The Financial Accounting Foundation (FAF) created FASB to establish and improve standards of financial accounting and reporting for nongovernmental entities. “Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors and others rely on credible, transparent and comparable financial information. The FASB is part of a structure that is independent of all other business and professional organizations. That structure includes the Financial Accounting Foundation (Foundation), the FASB, the Financial Accounting Standards Advisory Council (FASAC), the Governmental Accounting Standards Board (GASB), and the Governmental Accounting Standards Advisory Council (GASAC).The FASB maintains the FASB Accounting Standards Codification TM (Accounting Standards Codification) which represents the source of authoritative standards of accounting.” (“Facts about FASB,” 2012). “The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports.” (“Facts about FASB,” 2012). “To accomplish its mission, the FASB acts to improve the usefulness of financial reporting by focusing on the primary characteristics of relevance and reliability and on the qualities of comparability and consistency; keep standards current to

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