Which of the following is a responsibility of the fasb?

Established in 1972, the Financial Accounting Foundation [FAF] is the independent, private-sector, not-for-profit organization based in Norwalk, Connecticut, responsible for the oversight, administration, financing, and appointment of the Financial Accounting Standards Board [FASB] and the Governmental Accounting Standards Board [GASB].

The FAF comprises the FAF Board of Trustees, two standard- setting Boards [the FASB and the GASB], and the FAF management team.

The FASB and GASB establish and improve financial accounting and reporting standards—known as Generally Accepted Accounting Principles, or GAAP—for public and private companies, not-for-profit organizations, and state and local governments in the United States. Both organizations set high-quality standards through a process that is robust, comprehensive, and inclusive.

The FASB is responsible for standards for public and private companies and not-for-profit organizations.

The GASB is responsible for standards for state and local governments.

The FAF is a non-stock Delaware corporation that operates as a nonprofit as defined by the IRS.

Financial information on the FAF can be found here.

FAF MISSION

The collective mission of the FASB, GASB, and FAF is to establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial reports and to educate stakeholders on how to most effectively understand and implement those standards.

The FASB, the GASB, the FAF Trustees, and the FAF management contribute to the collective mission according to each one’s specific role:

• The FASB and the GASB are charged with setting the highest-quality standards through a process that is robust, comprehensive, and inclusive.
• The FAF management is responsible for providing strategic counsel and services that support the work of the standard-setting Boards.
• The FAF Trustees are responsible for providing oversight and promoting an independent and effective standard- setting process.

More information can be found in the Strategic Plan, at www.accountingfoundation.org/strategicplan.

FAF TRUSTEES

The FAF Board of Trustees comprises 14–18 members from varied backgrounds—users, preparers, and auditors of financial statements; state and local government officials; academics; and regulators.

The FAF directs the effective, efficient, and appropriate stewardship of the FASB and GASB in carrying out their missions, selects and appoints FASB and GASB members and their advisory councils, oversees the Boards’ activities and due process, and promotes and protects the independence of the Boards.

The Trustees participate on committees to provide oversight and review of key areas of governance including:

• Appointments
• Audit and Finance
• Executive
• Compensation
• Standard-Setting Process Oversight.

DIVERSE PERSPECTIVES

To ensure that a balance of perspectives are represented on the FAF Board of Trustees, the Appointments committee recruits potential Trustees from varied backgrounds and culturally diverse talent pools.

Currently the FAF Board of Trustees comprises:

This Board composition has served the FAF well, with each member bringing a unique perspective through different work experiences and areas of expertise.

Board diversity is a necessary element when overseeing and promoting an independent standard-setting process. This is especially important considering that the organizations that apply financial accounting and reporting standards—public and private companies, not-for-profit organizations, and state and local governments—differ dramatically in size, complexity, and resources.

Therefore, the FAF also strives to identify and appoint FASB and GASB members that reflect a diversity of experiences and backgrounds. While we may not always achieve the optimal balance, we aspire to it and continually seek to refine our selections to best reflect and serve the broad range of FASB and GASB stakeholders.

STANDARD-SETTING BOARDS

Financial Accounting Standards Board [FASB]
Established in 1973, the FASB is the independent, private-sector, not-for-profit organization based in Norwalk, Connecticut, that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles [GAAP]. The FASB is recognized by the Securities and Exchange Commission [SEC] as the designated accounting standard setter for public companies. FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs [AICPA]. The FASB develops and issues financial accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to investors and others who use financial reports. The FAF supports and oversees the FASB.

Governmental Accounting Standards Board [GASB]
Established in 1984, the GASB is the independent, private-sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles [GAAP]. These standards are recognized as authoritative by state and local governments, state Boards of Accountancy, and the American Institute of CPAs [AICPA]. The GASB develops and issues accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to taxpayers, public officials, investors, and others who use financial reports. The FAF supports and oversees the GASB.

COUNCILS

In order to ensure the broadest discussion of critical accounting and financial reporting issues, the FAF also oversees:

• Financial Accounting Standards Advisory Council [FASAC]: The primary function of FASAC is to advise the FASB on issues related to projects on the FASB’s agenda, possible new agenda items, project priorities, procedural matters that  may require the attention of the FASB, and other matters as requested by the chairman of the FASB.
   
• Governmental Accounting Standards Advisory Council [GASAC]: The GASAC is responsible for consulting with the GASB on technical issues on the GASB’s agenda, project priorities, matters likely to require the attention of the GASB, selection and organization of task forces, and such other matters as may be requested by the GASB or its chair.
   
• Private Company Council [PCC]: The PCC is the primary advisory body to the FASB on private company matters. The PCC uses the Private Company Decision-Making Framework to advise the FASB on the appropriate accounting treatment for private companies for items under active consideration on the FASB’s technical agenda. The PCC also advises the FASB on possible alternatives within GAAP to address the needs of users of private company financial statements. Any PCC proposed changes are subject to endorsement by the FASB.

POST-IMPLEMENTATION REVIEW [PIR]

The PIR process was initiated by the FAF Trustees as part of the FAF’s oversight responsibilities for its two standard-setting bodies— the FASB and the GASB. The PIR process is intended to assist the Trustees with their ongoing efforts to evaluate the effectiveness of the standard-setting process for both the FASB and the GASB.

More information on the Post-Implementation Review can be found here.

FUNDING THE FAF, THE FASB, AND THE GASB

The work of the FAF, the FASB, and the GASB is funded by a combination of accounting support fees, subscriptions and publication revenue, and investment income. The largest share of financial support for the standard-setting Boards comes from accounting support fees. Those fees are paid by publicly traded companies [for the FASB] and municipal bond brokers and dealers [for the GASB]. Neither the FAF nor the FASB or GASB receive any funds from Federal, state, or local governments. More information can be found on the FAF website “How We’re Funded” page.

ADDITIONAL INFORMATION

For further information about the FAF, including FAF Board of Trustee meeting schedules, access the FAF website at www.accountingfoundation.org.

Under the policies maintained by the Foundation with respect to conflicts of interest and personal activities, members of the FASB and GASB standard-setting boards, as well as members of the FASB’s and GASB’s research and technical staffs, must file annual reports acknowledging their adherence to those policies and disclosing permitted exceptions and certain information about their investments. These reports must be updated on a quarterly basis. Copies of the most current reports filed with the Foundation by a reporting person are available for inspection, at the offices of the Foundation in Norwalk. Persons requesting to inspect any report must, before being granted access, supply: [i] their name, address and telephone number; [ii] the name, address, and telephone number of the person, organization or group, if any, they represent; and [iii] the purpose of their request to inspect. These requests should be made in writing and addressed to the Executive Director of the Foundation, with a copy to the Vice President and General Counsel. The Foundation requires a minimum of five business days from receipt of a request to determine whether such request shall be granted; in some circumstances, a decision to grant such request may require additional time if the Foundation decides that the request should be reviewed by the Executive Committee of the Foundation’s Board of Trustees to determine whether it is proper under the Foundation’s applicable policies. Examples of requests that will be deemed improper, and therefore not granted in whole or in part, would be those that are determined to have been made for personal or financial gain; for the purpose of determining a credit rating [of any person]; in connection with a solicitation, directly or indirectly, of money or other items of value [including financial services] for any purpose; or for any purpose that is unlawful.

What is the responsibility of FASB?

Is FASB responsible for GAAP?

Does FASB have regulatory authority?

Who is responsible for comply with accounting standards?