GASB Gets Mixed Responses in Financial Accounting Board’s Report
A report prepared by Governmental Accounting Standards Board and commissioned by Financial Accounting Board revealed mixed responses around the responsibilities that GASB should carry out as the board that sets accounting standard for local and state governments.
FAF’s intention behind commissioning the report was to offer insights to the trustees of their board. The report was prepared to help trustees understand how Governmental Accounting Standards Board can serve stakeholders in the best way in terms of their mission. A total of three researchers including Donald R Deis, Kenneth A. Smith and Marc A. Rubin from 3 different universities worked together to conduct the study. The study was carried out to offer deep understanding and information regarding the expectations and needs of the GASB’s stakeholders, including auditors, users and preparers.
The research was also conducted to find out the stakeholders expectations and understanding as far as the role of reporting related standards and accounting was concerned. The research was commissioned to find out whether users of the finance related reports were able to make assessments regarding the accountability of reporting governments or not. The study revealed that GASB is considered as the apt body for setting finance related accounting principles for local and state governments. But the research also found that there was difference of opinion regarding two of Governmental Accounting Standards Board scope revolving around process and topics.
The research clarified that while some people were in support, others opposed GASB’s active involvement in areas including finance related projections, budget preparing, financial sustainability, cost related reports and reporting on performance. As far as all the topics were concerned, the respondents were supportive of GASB offering voluntary suggestions and guidance.
On the other hand, as far as the procedure for setting standards is concerned, the research revealed that preparers and auditors usually prefer a slower system that provides additional opportunities for input as well as minimizes the complexities and cost associated with implementation.
The trustees of FAF are planning to revisit and review the findings of the study as well as find out if they can define GASB’s nature of authority when it comes to setting principles for financial reporting and accounting for local and state governments.