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Which private organization establishes the financial accounting standards used in the United States?
AThe International Accounting Standards Board
BThe Securities and Exchange Commission
CThe Public Company Accounting Oversight Board
DThe Financial Accounting Standards Board
Answer & Solution
Correct answer: D. The Financial Accounting Standards Board
1. Accountants in the United States follow generally accepted accounting principles, or GAAP, when preparing financial statements.
2. The Financial Accounting Standards Board is the private organization responsible for establishing those standards.
3. The International Accounting Standards Board sets the international standards, IFRS, rather than the United States standards.
4. The Public Company Accounting Oversight Board sets auditing standards, and the Securities and Exchange Commission appoints and oversees that board.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.1 Accounting: More than Numbers_
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