Fasb and the Standard-Setting Process

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Running Header: THE FASB FASB and the Standard-Setting process Name: Institution: Course: Tutor: Date: Abstract Financial Accounting Standards Board (FASB) is a seven member board that consists of accounting professionals who establishes and communicates financial accounting and reporting standards known as generally accepted accounting principles (GAAP) in United States. The standards’ quest is to govern the preparation of the corporate financial reports and hence ensuring transparency, credibility and understandability of the financial statements. To achieve these, there is need to set guidelines that create uniformity in the preparation of the statements across the region. In this paper, we will focus on the…show more content…
They are set to facilitate the preparation of high quality accounts in the United State so as to meet the user needs and to enhance the growth in accounting methodologies. Additionally, they are set to make it easy for entities to refer to the already set standards in preparation of their financial reporting. As such and considering their benefits to the economy, because they create uniformity in the financial reporting, they facilitate the transfer of labor across the regions in the United States. Besides, by making the presentation of the statements easier and understandable, the users of financial statements are able to make their rational investments and analytical decisions regarding the companies issuing the report. And more importantly, by enhancing understandability, comparability, relevance and reliability in the preparation of financial statements, potential investors are able to assess companies’ financial position for their rational economic decisions. Role of ethics in financial reporting Ethics in financial reporting is all about maintaining the truthfulness and fairness of the financial position of the entity in the financial statement and in conformity with the laid down accounting standards. Since they present all data relating to the historical, current and
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