Accounting Standards Board Paper

Accounting Standards Board Paper

It is important for standards of accounting to be followed by all businesses all over the world. Without these standards, financial reporting can become inconsistent and the credibility of companies can be lost due to inaccurate reporting. There are two types of accounting standard boards discussed in this paper, and they are International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB). For individuals wanting to pursue an accounting career, it is important for them to have knowledge of IASB and FASB processes.

History of the Relationship between FASB and IASB

The FASB is responsible for implementing and improving financial accounting standards. It is also responsible for governing the preparation of financial reports by non-governmental organizations. IASB is responsible for implementing international financial reporting standards. The FASB replaced the Accounting Principles Board (APB) in 1972. The members of the APB were part-time, unpaid members but when FASB took over they became full-time, paid members. The FASB was given official approval after 1973 of being in charge of the issuance of accounting standards (Schroeder, Clark, & Cathey, 2011).

There are several organizations making up FASB, and they are The American Accounting Association, AICPA, Financial Executives Institute, National Association of Accountants, and the Financial Analysts Federation. In 1997, FASB added four additional members from the Financial Accounting Foundation, which appoints Financial Accounting Standards Advisory Council (FASC), which advises the FASB on policy issues, task force selection and agenda topic (Schroeder, Clark, & Cathey, 2011). Both IASB and FASB put a great deal of emphasis on income statements, balance sheets, statements of changes in equity and cash flow statements. Over the last decade the IASB and FASB determine accounting standards all over the world and work towards...