The Financial Accounting Standards Board has the authority to develop generally accepted accounting principles. Choose the option below that contains the steps used by the FASB in developing GAAP.

Question

Quizplus · Accepted Answer

The FASB follows a process that includes issuing a discussion memorandum to solicit feedback, then issuing an exposure draft of the proposed standards, and finally issuing a statement of principle that sets forth the new GAAP. This process involves seeking input from stakeholders and allows for review and revisions based on feedback before issuing a final statement. Option A incorrectly includes publishing a notice in the newspaper and seeking public opinion as steps in FASB's process, which are not specific enough. Option B includes filing a legal draft and notifying the SEC, which are not part of the FASB's process. Option D includes filing a complaint with the SEC and issuing an internal report, which are not part of the FASB's process for developing GAAP.

The Financial Accounting Standards Board Has the Authority to Develop