Explain the role of Financial Accounting Standards Board (FASB) ?

The goal of financial accounting standards is to help stakeholders make informed investment decisions based on honest financial statements. The standards are designed to promote transparency in financial reporting. When information is transparent, it is visible and understandable to the public. This enables potential investors and creditors to make accurate evaluations of the businesses' finances. Accounting standards also help the board of directors to assess management's effectiveness. Financial statements identify areas that need improvement and enable the boards to take early corrective actions.

FASB is the independent agency that establishes accounting principles and accounting procedures. The body of these procedures and principles is called "GAAP - Generally Accepted Accounting Principles."

The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports.

That mission is accomplished through a comprehensive and independent process that encourages broad participation, objectively considers all stakeholder views, and is subject to oversight by the Financial Accounting Foundation’s Board of Trustees.