Accounting Standard Board

Accounting Standard Board

Many companies use accounting to record, maintain, report, and analysis financial transactions. Because the decision-making of managers and investors make their decisions from the financial statements, they must be reliable. There are changes in accounting throughout the years making accounting standards that need to be changed alone with them. So the FASB and IASB are needed. The FASB (Financial Accounting Standard Board) and the IASB (International Accounting Standard Board) are the influential boards that influence standard setting in accounting systems. This paper will provide brief history of each board and their relationship, IASB equivalent to the FASB original pronouncements. Also there will be discussion of the benefit of MSA (Master of Science in Accounting) program and how it guides students to future professional life in accounting vocation.

History of FASB

The FASB is in the United States, sets GAAP (General Accept Accounting Principles). It was established by the AICPA (American Institute of Certified Public Accountants) because of recommendations from the Wheat Committee in 1973. FASB is responsible to set and improve guidelines in regard to standards that will govern the financial reporting of private entities. FASB operates on an independent scale and is part of a structure that includes FASAC (Financial accounting standards advisory council) that advises them on policy issues, selection of task force, and agenda of topics (Schroeder, Clark, & Cathey, 2011). "The FASB issued two types of pronouncements, Statements of Financial Accounting Standards (SFASs) and Interpretations. Subsequently, the FASB established two new series of releases: (1) Statements of Financial Accounting Concepts (SFACs) and (2) Technical Bulletins. SFASs conveyed required accounting methods and procedures for specific accounting issues and officially created GAAP" (Schroeder, Clark, & Cathey, 2011).

There are many companies that think the standards from FASB are overburdening some. These companies want them to change it into two standards to help companies (Schroeder, Clark, & Cathey, 2011). They have not changed this. There was also economic society for accounting the need for the FASB to fully consider both the necessity to further develop sound reporting practices and the possible economic consequences of new codification content. There will never be a standard that will please everyone.

History of IASC

In 1973 the IASC (International Accounting Standards Committee) was formed and their purpose was to build the IASB (International Accounting Standards Board) that would function similar to that of FASB. The IASC thought accounting regulating bodies from countries such as Germany, Canada, France, Mexico, Australia, United Kingdom, Japan, Netherlands, and the United States. In 2001, the IASB was built with guidelines similar to US GAAP that is intended for accounting industry to have closer relation regarding entity's financial reporting.

In 1997, the Standing Interpretations Committee was formed to issue compatible standards to be recognized by IASB and FASB. ISAB was formed for two objectives that are, to create and publish accounting standards