Accounting Standards Board Paper

Systematic accounting practices are paramount in creating financial information that is useful to the users. For information to be useful it must assist in decision-making and possess the characteristics of relevance, reliability, comparability and consistency with underlying assumptions such as monetary unit, economic entity, time period, and going concern as well as cost principle (Kimmel, Weygandt & Kieso 2007.) Therefore, a variety of standard setting bodies have been developed to determine guidelines. Two of these bodies include the Financial Accounting Standards Board (FASB), which is the primary for the United States and the International Accounting Standards Board (IASB), which is the primary for countries outside the United States.
The FASB started in 1973 and replaced the Accounting Principles Board (APB) and the Committee on Accounting Procedure (CAP). “The FASB‘s mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information” (Schroeder, Clark, & Cathey 2005, p. 7).   The FASB issues four types of pronouncements, to define and educate Generally Accepted Accounting Principles (GAAP) users: 1. Statements of Financial Accounting Concepts, 2. Statements of Financial Accounting Standards, 3. Interpretations, and 4. Technical Bulletins (Schroeder, Clark, & Cathey 2005). These are then given a level of authority that is enforced by the SEC and thus a hierarchy is established that assist in selecting the principles to use in different accounting issues. The board that governs the FASB is the Financial Accounting Foundation (FAF). Fifteen trustees appoint the Financial Accounting Advisory Council (FASAC), which advises the FASB and appoints the seven members of The FASB, most of which are Certified Public Accountants (CPA’s) in public practice (Schroeder, Clark, & Cathey 2005).  
The IASB objectives are: 1. To formulate and publish...