Accounting Standards Board
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Running head: ACCOUNTING STANDARDS BOARD
Accounting Standards Board
University of Phoenix
ACC/541
History of IASB and FASB
The International Accounting Standards Board (IASB) began operations in 2001. The purpose of the IASB is to develop a single set of global accounting standards for all companies to follow regardless of what country they are located. The focus of these accounting standards is to provide transparency and comparable information in reporting standards and procedures. Comparability is a critical component of international companies being able to analyze and audit financial statements around the globe. The IASB has developed procedures that bring transparency, predictability, and consistency (IASB, 2007).
The Financial Accounting Standards Board (FASB) began operations in 1973. FASB is the most recognized name in financial accounting standards within the private sector of businesses. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA) both recognize FASB as the official authority of accounting standards and practices. FASB standards govern the preparation of financial statements for most private sector companies. 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 (Financial Accounting Standards Board, 2010). These standards are critical to efficient financial reporting because creditors, auditors, investors, and stakeholders rely on transparent, credible, verifiable, and comparable financial information about organizations.
The IASB and FASB have been working together since 2002 to achieve a convergence of International Financial Reporting Standards (IFRS) and the widely used generally accepted accounting principles (GAAP). A common set of high quality global standards remains a priority of both IASB and FASB. The...
Accounting Standards Board
University of Phoenix
ACC/541
History of IASB and FASB
The International Accounting Standards Board (IASB) began operations in 2001. The purpose of the IASB is to develop a single set of global accounting standards for all companies to follow regardless of what country they are located. The focus of these accounting standards is to provide transparency and comparable information in reporting standards and procedures. Comparability is a critical component of international companies being able to analyze and audit financial statements around the globe. The IASB has developed procedures that bring transparency, predictability, and consistency (IASB, 2007).
The Financial Accounting Standards Board (FASB) began operations in 1973. FASB is the most recognized name in financial accounting standards within the private sector of businesses. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA) both recognize FASB as the official authority of accounting standards and practices. FASB standards govern the preparation of financial statements for most private sector companies. 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 (Financial Accounting Standards Board, 2010). These standards are critical to efficient financial reporting because creditors, auditors, investors, and stakeholders rely on transparent, credible, verifiable, and comparable financial information about organizations.
The IASB and FASB have been working together since 2002 to achieve a convergence of International Financial Reporting Standards (IFRS) and the widely used generally accepted accounting principles (GAAP). A common set of high quality global standards remains a priority of both IASB and FASB. The...