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Final Paper

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Final Paper
ACC 305: Intermediate Accounting I

The Financial Accounting Standards Board (FASB) was established in 1973 in order to create and develop standards of financial accounting and reporting for the general use of the public and, in particular, users of financial information including auditors, creditors and investors. This financial information is standardized for greater clarity for the guidance and education of users (FASB org, 2009a). The primary purpose of FASB as a private and non-profit organization is to develop Generally Accepted Accounting Principles (GAAP) in the United States. The FASB sets-up accounting standards for public companies in the U.S. under the mandate of the Securities and Exchange Commission (SEC). Hence, the FASB oversees the financial security; stability and overall well-being of the U.S. economy in its role of ensuring the standardization and credibility of financial information that are made available to the public.
The Financial Accounting Foundation (FAF) that was established in 1972 as an independent and private sector organization (FAF, 2009) handle the general oversight, administration and finances of the FASB. The FASB is composed of seven full time board members that have extensive knowledge and experience in accounting, finance and business, as well as ethical concern that public interests are well represented in matters pertaining to financial accounting and reporting. The board members are chosen from diverse backgrounds in the field of accounting and business, which they collectively represent. However, in the interest of objectivity and fair play, they are required to sever all connections from their previous affiliated institutions. Each board member is appointed to a five-year term and is eligible for another five-year term of service. Expiration of term is on the 30th of June (FASB org., 2009a).
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