Accounting Fundamentals Certification (AFC) 2025 – 400 Free Practice Questions to Pass the Exam

The Financial Accounting Standards Board (FASB) is the primary agency responsible for developing accounting principles in the United States. Established in 1973, FASB's mission is to enhance the usefulness of financial reporting by establishing and improving standards of financial accounting and reporting. It sets Generally Accepted Accounting Principles (GAAP), which are essential for providing transparency and consistency in financial statements that companies use to communicate their financial position to investors and the public.

Through a thorough process involving public input and collaboration, FASB creates guidelines that ensure that financial information is reliable and comparable across different organizations, facilitating better decision-making by investors, creditors, and other stakeholders.

While the SEC regulates the securities markets and ensures compliance with the federal securities laws, and the AICPA plays a vital role in supporting the accounting profession and setting ethical standards, it is FASB that specifically focuses on the creation and evolution of accounting standards that govern financial reporting. The IRS, meanwhile, primarily deals with tax-related matters and does not play a role in the development of accounting principles.