... From 1973 to present day, the Financial Accounting Standards Board (FASB) has been the standard setting body. The Financial Accounting Standards Board has seven full time board members that develop Statement of Financial Accounting Standards (SFAS) and Statement of Financial Accounting Concepts (SFAC). ... This theoretical framework is considered to be one of the major accomplishments of the Financial Accounting Standards Board. Pronouncements from the Committee on Accounting Procedure and the Accounting Principles Board remain in effect unless amended or superseded by the Financial Accounting Standards Board. (1)
The mission of the Financial Accounting Standards Board is to develop and improve standards of financial accounting and reporting for the guidance and education of users of the financial information. High quality accounting standards should result in accounting information that is relevant, reliable, neutral, comparable, and consistent. (2)
The Financial Accounting Standards Board gets several requests for action on a variety on financial accounting and reporting topics. For all major projects on the Financial Accounting Standards Boards’ agenda, an advisory task force of outside experts is appointed, existing literature is studied, a discussion document listing possible solutions is published for public comment, a public hearing is conducted, and an exposure draft of the proposed statement is distributed. They may turn to many other organizations for advice such as the Financial Accounting Advisory Council, the Accounting Standards Executive Committee on Auditing Standards, and committees from the Association for Investment and Management Research, the Financial Executives Institute, the Institute of Management Accountants, and Robert Morris and Associates. ... (3) The members of the Financial Accounting Standards Board follow certain guidelines in regard to their conduct. They must be objective in their decision making to ensure that there is neutrality in the outcome, the must take into account the views of the users of the financial information, they must try to evaluate the cost versus the benefit of the standard, they try to make changes in a way that minimizes disruption of the reporting practice, and they must review the effects of past decisions and amend or replace the standards quickly when action is needed.
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