Financial Accounting Standards Board

Since 1973, the Financial Accounting Standards Board (FASB) has had primary responsibility for establishing financial accounting and reporting standards for the private sector in the United States. The pronouncements of the Financial Accounting Standards Board are considered authoritative by both the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA). Thus the work of the Financial Accounting Standards Board is a cornerstone of Generally Accepted Accounting Principles (GAAP). An important component of the Financial Accounting Standards Board is its Emerging Issues Task Force, which is charged with identifying important issues that the Financial Accounting Standards Board needs to consider. The Financial Accounting Standards Board has seven full-time members, who are required to cut all ties to the firms or organizations they previously served. The Financial Accounting Standards Board is also assisted by about 70 professional employees. Despite its apparent independence and professional support, the Financial Accounting Standards Board receives substantial criticism from legislators, executives, and business critics. But given the controversial issues the Financial Accounting Standards Board decides, criticism may be impossible to avoid.