Question

Compare GASB financial statement requirements of United States with United Kingdom. Would the same financial statements be used and why?

Answer 1

Established in 1984, the Governmental Accounting Standards Board (GASB) is the independent, private-sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (GAAP).

The GASB standards are recognized as authoritative by state and local governments, state Boards of Accountancy, and the American Institute of CPAs (AICPA). The GASB develops and issues accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to taxpayers, public officials, investors, and others who use financial reports.

The Financial Accounting Foundation (FAF) supports and oversees the GASB. Established in 1972, the FAF is the independent, private-sector, not-for-profit organization based in Norwalk, Connecticut responsible for the oversight, administration, financing, and appointment of the GASB and the Financial Accounting Standards Board (FASB).

GASB MISSION

The collective mission of the GASB, the FASB, and the FAF is to establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial reports and educate stakeholders on how to most effectively understand and implement those standards.

The GASB, the FASB, the FAF Trustees, and the FAF management contribute to the collective mission according to each one's specific role:

The GASB and the FASB are charged with setting the highest-quality standards through a process that is robust, comprehensive, and inclusive.

The FAF management is responsible for providing strategic counsel and services that support the work of the standard-setting Boards.

The FAF Trustees are responsible for providing oversight and promoting an independent and effective standard-setting process.

More information can be found in the Strategic Plan, at www.accountingfoundation.org/strategicplan.

BOARD MEMBERS

The seven members of the GASB include a chairman and a vice chairman. Board members are appointed by the FAF Board of Trustees generally for 5-year terms; they may serve up to 10 years. The chairman serves full-time. The vice chairman and the remaining five members serve on a part-time basis. GASB members are required to have knowledge of governmental accounting and finance and a concern for the public interest in matters of accounting and financial reporting.

The Governmental Accounting Standards Board (GASB) has sought to expand its standards setting into new areas of accountability reporting, including performance reporting. However, some of these standards have not been widely implemented. This article seeks to understand the contentious nature of accountability reporting areas through an application of accountability and voluntary club theories. We find that the different intended uses of accounting information, the complex nature of the accountability concept and the divergence of views of the objectives of accounting contribute to the dispute over public reporting in the US. These diverging views are especially consequential due to the voluntary, or club-like, nature of the U.S. public sector accounting system.