QandAs: Legal

What is the FASB or Financial Accounting Standards Board?

Answer:
The Financial Accounting Standards Board (FASB)

is a private organization whose responsibility is to establish and improve standards of financial accounting and reporting to educate and guide the public regarding financial information. These responsibilities were designated to the FASB by the Securities and Exchange Commission (SEC).

The FASB was created in 1973 and replaced the Accounting Principles Board and the Committee on Accounting Procedure. These entities were part of the American Institute of Certified Public Accountants. Although the responsibilities of the FASB were designated by the SEC, the FASB is not a governmental body. The FASB is independent structure; however, this independent body is overseen by the Financial Accounting Foundation (FAF).

The FASB keeps standards current to reflect changes in doing business and to reflect changes that may be affected by the economy. They also act to improve the understanding of the language contained in financial reports. Activities of the FASB are open to public participation and observation.