Who Sets Accounting Standards in the U.S. ?
Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector in the U.S. for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants.
Securities and Exchange Commission
The Securities and Exchange Commission (SEC) has statutory authority to establish financial accounting and reporting standards for publicly held companies under the Securities Exchange Act of 1934. Throughout its history, however, the Commission’s policy has been to rely on the private sector for this function.
Financial Accounting Standards Board (FASB)
The mission of FASB is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors and users of financial information. The FASB develops broad accounting concepts as well as standards for financial reporting. It also provides guidance on implementation of standards, known as Statements of Financial Accounting Standards (SFAS). For example, 2013 US GAAP Financial Reporting Taxonomy, 2014 US GAAP Financial Reporting Taxonomy