The Financial Accounting Standards Board (FASB) provides the generally accepted accounting principles (GAAP) that are utilized by the state and the local governments. This organization is a private, not-for-profit and non-governmental institution. It is headed by the Accounting Foundation (FAF) and receives funds from the latter. The mission of the FASB is to oversee to the establishment and improvement of standards of accounting and financial reporting so as to inform and educate the people, including the auditors, the issuers and those who may have use of these financial reports (Miller et al 1998).
The IASB works together with other standard setters, namely the FASB to converge national accounting standards and the International Financial Reporting Standards (IFRS) that would bring about superior quality solutions. Pros include a more reliable and transparent cross border transactions. This will also result in a decrease in the costs of foreign companies that invest in the United States market as the GAAP serves to deter foreign investors in raising money in the capital markets in the United States. Cons of this convergence include difficulty in ensuring a credible financial statement as the convergence would bring about inconsistencies in auditing as well as in enforcing of international policies. Furthermore, there are still several obstacles that needs to be hurdled such as converting the records of tax directors and CFOs as well as adequate training for investors and audit firms.
Miller, Paul B. W., Redding, Rodney J., and Bahnson, Paul R. (1998). The FASB”The People, the Process, and the Politics. New York: Irwin/McGraw-Hill.
Reports in Print. International Journal of Government Auditing. . FindArticles.com. 24 Sep. 2008. http://findarticles.com/p/articles/mi_qa3662/is_200704/ai_n19430977