The Federal Accounting Standards Advisory Board
Which organization provides the accounting standards for the United States government to follow in the preparation of its consolidated financial statements? FASB? GASB? No, the standards established for this purpose are those promulgated by the FASAB (The Federal Accounting Standards Advisory Board). The Government Management Reform Act of 1994 established the foundation for the preparation and audit of consolidated financial statements for the United States Government. In recognition of the unique nature of the United States Government, it was decided that a unique set of accounting standards should be developed for its financial statements. The Secretary of the Treasury, the director of the Office of Management and Budget (OMB), and the Comptroller General established the Federal Accounting Standards Advisory Board (FASAB) in October 1990 in order to provide a mechanism to generate these standards. The initial basic set of Federal Financial Accounting Standards (FFAS) were completed by the board in 1996.
The board is composed of one member each from the Department of the Treasury, OMB, the General Accounting Office (GAO), and the Congressional Budget Office; one member representing the defense and international agencies; another representing the civilian agencies; and three non-Federal members representing the general financial community, the accounting and auditing community, and academia. Board members are appointed for initial terms of two years and may be reappointed for subsequent terms. The chairperson is selected by the board's principals-the OMB Director, the Comptroller General, and the Secretary of the Treasury. The board's primary mission is the establishment of Federal accounting standards which meet user needs and enhance the understandability, relevance, and reliability of Federal financial reporting. In addition, the board is responsible for providing advice on how to implement the standards, helping to improve understanding of information reflected in financial reports, relating standards and principles to associated benefits and costs, reviewing the impact of current and revised standards, developing rules of procedures to allow for the review of financial reporting and accounting issues, and being objective and neutral in order to most appropriately represent the effects of Federal Government activities.
In considering new accounting standards, the board identifies accounting and agenda issues, then holds preliminary deliberations, prepares initial due process documents, releases documents such as exposure drafts to the public, holds public hearings and considers comments, holds further deliberations, and reaches a general consensus before submitting final documents to the OMB Director and the Comptroller General, who retain the final authority for promulgating Federal accounting rules. …