The Financial Accounting Standards Board is the private-sector organization empowered to establish financial accounting and reporting standards. Although this function legally resides with the Securities and Exchange Commission for public companies, the SEC has traditionally provided the private sector with the opportunity for self-regulation. Since 1973, the Commission has relied on the FASB for standard setting. The mission of the 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.
Accounting standards are important to all.
They are critical to the free enterprise system and the deep and liquid capital markets that we enjoy in the United States. The information that results when the standards are applied is used to help allocate scarce capital resources and to provide a basis of corporate accountability. These standards are critical to the efficiency of the U.S. capital markets. In keeping with our free enterprise economy, it is appropriate that financial accounting and reporting standards be established by those that rely on them so heavily, i.e., the participants in the private sector. The FASB operates under the oversight of the Financial Accounting Foundation, which is responsible for raising funds for both the FASB and its counterpart for state and local government, the Governmental Accounting Standards Board.