Accounting Standards Boards Paper

Accounting Standards Boards Paper

Accounting Standards Boards Paper

The Financial Accounting Standards Board (FASB) was established in 1973, and granted the authority to institute accounting standards for non-government issuers that constitute Generally Accepted Accounting Principles (GAAP). These standards are required for both U.S. companies and foreign companies registered in the United States. These standards dictate how financial statements are prepared in the United States as a measure of consistency, comparability, relevance, and reliability. Also in 1973, the London-based equivalent, the International Accounting Standards Committee (IASC) was formed for as an international parallel to the FASB. A predecessor to the FASB-equivalent International Accounting Standards Board (IASB), the IASC was formed with the intent to improve financial reporting and detour poor accounting techniques.
Similar to the IASC, the FASB’s undertaking includes “a mission to establish and improve standards of financial accounting and reporting” (FASB – international convergence, 2010, para. 3). As a result of a restructuring to IASC in 1999, The IASB was formed to assume standard setting responsibilities as an independent standard setter of the International Accounting Standards Committee Foundation (IASCF). The IASB assumed this responsibility in 2001. The FASB represented a component of the team dedicated to the restructuring that led to the IASB. Though similar in mission, these standard setting bodies differed in many respects.   By examining the past and present interactions of these two standards setting bodies, one recognizes the movement toward a cohesive set of global financial reporting standards.
The Past Relationship
In the early 1960s, the AICPA documented a need for greater international cooperation in the accounting industry at the 8th International Congress of Accountants.   However, because the IASB is only on the brink of its 10th year of existence, the relationship span discussed...