Jun 15 2008
What Is the FASB?
The FASB is an organization that provides standardized guidelines for financial information. The mission of Financial Accounting Standards Board (FASB) is to establish and improve standards of accounting and financial reporting for orientation and public education, including issuers, auditors and users of the financial information. Accounting standards are essential for the proper functioning of the economy because decisions on the allocation of resources rely heavily on credible, concise, transparent and understandable financial information.
Financial information on the operations and financial condition of entities is also used by the public on the importance of various other kinds of decisions. To accomplish its mission, the FASB acts:
- Improving the usefulness of financial information by focusing on key characteristics of the relevance and the reliability and quality of comparability and consistency;
- Retain current standards to reflect changes in methods of doing business and changes in the economic environment;
- Consider without delay significantly the areas of deficiency in terms of financial information that could be improved through the standardization process;
- To promote international convergence of accounting standards along with improving the quality of financial reporting and
- Improve the common understanding of the nature and purposes of the information contained in financial reports.
The FASB is developing broad concepts of accounting and financial reporting standards. It also provides advice on the implementation of standards. The concepts are useful to guide the Council in setting standards and providing a frame of reference or conceptual framework, to resolve accounting issues.
This framework will help put in place reasonable limits on trial in the preparation of financial information and increase understanding and confidence in financial information from users of financial reports. It will also help the public understand the nature and limits of the information provided by financial information.
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