What We Do_ FASB - FAF Home OVERVI EW ACCOUNTI NG STANDARDS...

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FAF Home OVERVIEW: ACCOUNTING & STANDARDS What We Do: FASB WHAT WE DO: FASB ›› ›› The critical task of setting account standards in the world’s most dynamic economy is the responsibility of the Financial Accounting Standards Board (FASB). For most of the 19th and 20th centuries, the United States struggled to build an effective structure for creating and implementing consistent accounting standards that would provide reliable, transparent and comparable financial data to capital markets participants. By the 1970s, market participants agreed that the U.S. needed an independent, authoritative body to administer this critical task. In 1973, the FASB was born as the private, not-for-profit organization dedicated to setting the financial accounting standards that collectively are known as U.S. Generally Accepted Accounting Principles, or U.S. GAAP. The FASB derives its authority to set accounting standards from the U.S. Securities and Exchange Commission (SEC). The standards issued by the FASB are officially recognized as authoritative by the SEC, as well as the American Institute of Certified Public Accountants (AICPA). Investors, lenders, and other users of financial information rely on financial reporting based on U.S. GAAP to make decisions about how they allocate their capital and to help financial markets operate as efficiently as possible. The mission of the FASB is to establish and improve financial accounting and reporting standards to provide decision-useful information to investors and other users of financial reports. The FASB’s mission is achieved through an open and independent process that encourages broad participation from all stakeholders and objectively considers and analyzes all their views. The FASB’s due process is subject to oversight by the Financial Accounting Foundation (FAF) Board of Trustees. STRUCTURE OF THE FASB The FASB is one component of a non-profit standard-setting group that is autonomous of any business or government body. This group includes the FAF, 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 comprises seven full-time board members that are appointed by the FAF Board of Trustees. Members may serve up to two five-year terms. A professional staff of more than 60 people supports the FASB. Board members and staff are focused on the needs of investors, other capital markets participants, and the public interest when it comes to financial accounting and reporting. They all possess a background in investing, accounting, finance, education and research. To maintain their independence, members and staff must abide by restrictions on personal investments and other activities in order to avert potential conflicts of interest.
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