Which organization is responsible for setting most accounting reporting standards underlying GAAP?

The Financial Accounting Standards Board (FASB) is the organization that establishes and oversees the standards for accounting practices known as Generally Accepted Accounting Principles (GAAP). FASB's primary mission is to ensure transparency and consistency in financial reporting across different organizations, which helps to promote investor confidence and enhance the overall integrity of financial markets.

Created in 1973, FASB develops and issues accounting standards that govern how financial statements are prepared and presented. These standards are designed to reflect economic reality and provide information that is useful for investors, creditors, and other users of financial statements. The work of FASB is crucial in providing a framework that promotes comparability between different entities’ financial reports, thus aiding stakeholders in making informed decisions.

While other organizations like the Securities and Exchange Commission (SEC) have regulatory authority and oversight related to financial reporting, and the Public Company Accounting Oversight Board (PCAOB) focuses on the audit process, FASB is specifically responsible for the development of accounting standards that govern how financial reporting is conducted under GAAP. The American Institute of Certified Public Accountants (AICPA) plays a role in the development of standards and guidance, particularly for non-public companies, but it is FASB that sets the