American Business

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29-01-2010, 02:50

Financial Accounting Standards Board

The Financial Accounting Standards Board’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.” It serves the “investing public through transparent information resulting from high-quality financial reporting standards, developed in an independent, private sector, open due process.” Since 1973 the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting and reporting that govern the preparation of financial reports. The FASB is officially recognized as authoritative by the SECURITIES AND EXCHANGE COMMISSION and the AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. In further explaining its mission, the FASB states that “accounting standards are essential to the efficient functioning of the economy because decisions about the allocation of resources rely heavily on credible, concise, and understandable financial information. Financial information about the operations and financial position of individual entities also is used by the public in making various other kinds of decisions.”