The Financial Accounting Standards Board (FASB) is a private, independent

organization in the United States responsible for establishing and improving

financial accounting and reporting standards. FASB performs several key
functions:
1. **Standard Setting: ** FASB sets accounting standards known as Generally
Accepted Accounting Principles (GAAP) in the United States. These standards
guide the preparation, presentation, and disclosure of financial information in
financial statements.
2. **Continual Improvement of Standards: ** FASB continuously reviews and
updates existing accounting standards to ensure they remain relevant and useful
in reflecting the economic realities of business transactions. This involves issuing
new standards and amendments to existing ones based on emerging issues and
stakeholder feedback.
3. **Consultation and Collaboration: ** FASB engages in extensive consultations
with various stakeholders, including accountants, auditors, preparers of financial
statements, investors, and regulators. Collaboration helps FASB gather diverse
perspectives and insights when developing or revising accounting standards.
4. **Research and Analysis: ** FASB conducts research and analysis on
accounting issues and complexities to address emerging trends, technological
advancements, and changes in business practices. This research assists in making
informed decisions when developing or modifying accounting standards.
5. **Education and Guidance: ** FASB provides educational resources and
guidance to facilitate the proper application of accounting standards. This helps
stakeholders understand and implement GAAP effectively.
6. **Interpretation and Clarification: ** FASB issues interpretations and
clarifications on accounting standards to address specific questions or
uncertainties arising from the application of GAAP.
7. Convergence and Global Harmonization: FASB works towards convergence with
international accounting standards to enhance comparability and consistency in
financial reporting globally. Collaboration with international standard-setting
bodies, such as the International Accounting Standards Board (IASB), is aimed at
achieving greater harmonization of accounting standards.
8. **Monitoring and Enforcement: ** FASB monitors the application of
accounting standards and collaborates with the Securities and Exchange
Commission (SEC) in enforcing compliance with GAAP in financial reporting.
Overall, the primary goal of FASB is to establish and maintain high-quality
accounting standards that provide relevant, reliable, and comparable financial
information, benefiting investors, creditors, and other users of financial
statements.

The American Institute of Certified Public Accountants (AICPA) serves as the

leading professional organization for Certified Public Accountants (CPAs) in the
United States. The AICPA performs various functions aimed at supporting and
advancing the accounting profession:

1. **Setting Standards: ** AICPA establishes professional standards for the

accounting profession in the U.S. These standards include auditing standards,
accounting principles, and quality control standards.
2. **Certification and Licensure: ** AICPA administers the Uniform CPA
Examination, which is the standardized test required for individuals to become
licensed CPAs in the United States. It also provides resources and support for CPA
candidates preparing for the exam.
3. **Professional Development: ** AICPA offers numerous resources, continuing
education programs, seminars, webinars, conferences, and publications to help
CPAs stay updated with the latest industry developments, maintain their
professional competence, and fulfill their continuing education requirements.
4. **Advocacy and Representation: ** AICPA advocates for the accounting
profession's interests by engaging with government agencies, regulators, and
standard-setting bodies. It represents CPAs and provides input on legislative and
regulatory matters affecting the profession.
5. **Ethics and Professional Conduct: ** AICPA establishes and enforces a Code of
Professional Conduct that outlines ethical guidelines and standards for CPAs. This
code emphasizes integrity, objectivity, independence, and due care in the
accounting profession.
6. **Technical Guidance and Research: ** AICPA conducts research, issues
technical guides, practice aids, and publications to assist CPAs in navigating
complex accounting, auditing, taxation, and business advisory matters.
8. **Collaboration and Networking: ** AICPA facilitates networking opportunities,
forums, and communities for CPAs to connect, share knowledge, and collaborate
with peers within the profession.
The AICPA plays a vital role in promoting the integrity, competency, and relevance
of the accounting profession in the United States. Its functions are geared
towards supporting CPAs throughout their careers, ensuring adherence to high
ethical standards, and providing resources essential for professional growth and
development.

What Is the Accounting Principles Board?

The Accounting Principles Board (APB) was the authoritative body of the
American Institute of Certified Public Accountants (AICPA) from 1959 until 1973. It
was replaced in 1973 by the Financial Accounting Standards Board (FASB).
The purpose of the APB was to issue guidelines and rules on accounting
principles. Some of the opinions released by the APB still stand as part of the
Generally Accepted Accounting Principles (GAAP), but most have been either
amended or entirely superseded by FASB statements.
The main objectives and purposes of the Accounting Principles Board included:
Standard Setting: The APB aimed to establish and improve accounting principles
and standards to enhance the consistency and comparability of financial
reporting. It worked on issuing authoritative pronouncements on various
accounting topics to guide practitioners in their accounting practices.
Continual Improvement of Accounting Standards: The APB focused on continually
reviewing and updating accounting standards to reflect changes in the business
environment, financial markets, and regulatory requirements.
Coordination and Research: The APB coordinated efforts to research and resolve
accounting issues and inconsistencies. It aimed to provide guidance on accounting
practices and promote a consistent approach in financial reporting.
Collaboration with the Industry: It worked closely with professionals,
practitioners, and stakeholders in the accounting field to understand their needs
and challenges. The APB sought input from various entities to ensure that
accounting principles were relevant and practical for the business environment.

Some of the key reasons for the replacement of the APB include:
Perceived Lack of Independence: The APB was criticized for being too closely tied
to the American Institute of Certified Public Accountants (AICPA). This association
raised concerns about its independence and autonomy in setting accounting
standards. There were perceptions that the APB might be influenced by the
interests of the accounting profession rather than solely focusing on the public
interest.
Slow Response and Decision-Making Process: The APB was often criticized for its
slow response to emerging accounting issues and its lengthy decision-making
process. The time taken to address accounting problems and issue authoritative
guidance led to delays in updating accounting standards to reflect changing
business environments and emerging complexities.
Inadequate Solutions to Accounting Issues: Critics argued that the APB sometimes
provided vague or ambiguous solutions to accounting problems, leading to
inconsistent application of accounting standards and causing confusion for
financial statement preparers and users.
Complex Structure and Decision-Making Process: The APB's structure involved a
large number of members, representing various professional organizations. This
structure made it challenging to reach a consensus efficiently and often resulted
in difficulties in decision-making and the issuance of timely, clear, and relevant
accounting standards.

International Accounting Standards Committee

The International Accounting Standards Committee (IASC) was

an independent international organization that played a significant role in the
development and promotion of
international accounting standards
before the formation of the International Accounting Standards Board (IASB).
On 1 April 2001, IASC was replaced by the International Accounting Standard
Board (IASB). The IASC was founded as a result of an agreement between
accounting bodies.
Established in 1973, the IASC aimed to improve the uniformity of accounting
principles and practices worldwide.
It sought to achieve this by promoting the development and adoption of a set of
high-quality, globally accepted accounting standards.

IASC functions
The International Accounting Standards Committee (IASC) performed several key
functions aimed at promoting the development and adoption of international
accounting standards. Some of the primary functions of the IASC included:

Standard Setting: The IASC was responsible for developing International

Accounting Standards (IAS). It worked on creating a comprehensive set of
accounting standards that were globally accepted and could be applied
consistently across different countries and industries. The goal was to enhance
transparency, comparability, and understanding of financial statements
worldwide.

Promotion: The committee advocated for the use of international accounting

standards. It encouraged countries and entities to adopt and implement these
standards to improve the quality and reliability of financial reporting on an
international level.

Collaboration and Cooperation: The IASC collaborated with various stakeholders,

including national accounting standard-setting bodies, professional organizations,
regulators, multinational corporations, and investors. This collaboration aimed to
gather input, expertise, and feedback to ensure that the international accounting
standards were relevant, practical, and reflective of the needs of diverse users
and entities across the globe.

Monitoring and Maintenance of Standards: The IASC monitored the

implementation of international accounting standards and was responsible for
maintaining and revising existing standards. It reviewed and updated the IAS to
address emerging issues and changes in business practices, ensuring that the
standards remained relevant and useful.

Education and Awareness: The committee also played a role in educating and
raising awareness among stakeholders about international accounting standards.
It provided guidance, publications, and resources to help users understand and
apply the standards effectively.

Overall, the IASC functioned as a driving force behind the development and
promotion of international accounting standards, aiming to enhance the quality,
comparability, and transparency of financial reporting globally. Its efforts laid the
foundation for the International Accounting Standards Board (IASB), which
succeeded the IASC and continues its mission of setting high-quality, globally
accepted accounting standards known as International Financial Reporting
Standards (IFRS).

In summary, professional accounting bodies play a vital role in maintaining the quality, integrity, and
credibility of financial information globally. They contribute to the effective functioning of financial
markets, support economic growth, and help safeguard the interests of investors and the public.