Linkage GAAP with FASB

GAAP stands for Generally Accepted Accounting Principles. GAAP is a combination of authoritative standards established by board policy Iyang) and just generally accepted ways of recording and reporting accounting information. 

The origin of Generally Accepted Accounting Principles and body issued Financial Accounting Standards Board (FASB) can be traced to the Securities Exchange Commission (SEC) in major depression. The main purpose of the Securities Exchange Act is to restore and rebuild investor confidence in the integrity of capital markets. SEC is given authority to prescribe accounting principles and procedures for companies under its jurisdiction. 

The role of established GAAP and then transferred to the Financial Accounting Standards Board (FASB), an independent board that is specially made in 1973. The goal is to develop financial standards and reporting akuntasn that will help maintain user confidence in the financial statements. This goal will be met primarily to establish the credibility of reported financial data. Statement issued FASB body known as U.S. GAAP.

FASB makes accounting rules, but the SEC to force them. SEC retain the power to establish GAAP, accounting practices and imposed a moratorium on even rejected the claim of private sector if there is no reason to disagree with the FASB. 

U.S. GAAP is the standard business that builds credibility by applying a uniform set of rules and practices when reporting financial data.Without the financial reporting standards, will be very difficult for lenders, investors and other users of financial statements to compare and assess the actual financial condition of the company. 

A statement issued by the FASB as it affects most businesses in the United States is becoming more important because the FASB proposes major changes. 
FASB own mission is to establish and improve standards of accounting and financial reporting for the guidance and public education, including issuers, auditors and users of financial information. 


FASB is not a government agency. The SEC has the legal authority to set accounting standards and financial reporting for public companies held by the Securities Exchange Act of 1934. Throughout history, however, the Commission has relied on the policy the private sector for this function to the extent that the private sector demonstrated the ability to fulfill responsibilities in the public interest.

FASB is part of the structure that is independent of all other business and professional organizations. Before this structure was created, financial accounting and reporting was first established by the Committee on Accounting Procedure of the American Institute of Certified Public Accountants (1936-1959) and later by the Accounting Principles Board, also part of the AICPA (1959 -1973). Statement predecessor bodies remain in effect unless amended or superseded by the FASB.