Accounting Standards Boards

Sharon Little

ACC 541

Marina Layvand

May 27, 2013

The FASB, Financial Accounting Standards Board was created in 1973 when the APB, Accounting Principles Board, was abolished. The FASB focuses on accounting standards in the United States. The board established the Generally Accepted Accounting Principles, or GAAP, emplyed by financial accountants in the United States. It also establishes rules and standards for individual certified public accountants practicing in the United States. The IASB, International Accounting Standards Board, focuses on global standards of accounting. It was established in 2001. The IASB has sixteen members on board, and each one has a vote. Members are selected based on their professional competence and practical experience. The IASB deals with the development of International Financial Reporting Standards and promotes the application of the standards. The IASB’s standards are used as national requirements, as the basis for some or all national requirements, as an international benchmark for those countries that develop their own requirements, by regulatory authorieties for domestic and foreign companies, and by companies themselves. (Schroeder, Clark, & Cathey, 2011, Ch. 3, p. 90-91). The FASB and the IASB work together to bring together a variety of accounting and financial reporting requirements that have been developed by both entities into single international financial reporting standards. Having one set of global accounting standards not only makes it easier for companies to adhere to the proper financial reporting standards, but it also makes their financial reporting more transparent. Although the IASB and the FASB work together, there are some major differences between these two entities. The