Reference no: EM132971198

The Government Accounting Standards Board (GASB) is an organization that establishes guidelines for accounting and financial reporting in US state and local government institutions. The GASB provides the standards for financial reporting (FAF, n.d). These are necessary as it ensures that these reports are useful and reliable official documents that serve and guide, or educate the public, auditors, issuers, and all individuals or groups who make use of government financial reports (GASB, 2020). GASB is the duly recognized official issuer of generally accepted accounting principles that guide local and state governments. This GASB authority is widely recognized by the accounting industry, all state and local government bodies, and the capital markets.

GAAP standards are necessary because government operates fundamentally differently from for-profit companies. People who use or view government financial reports have different information needs compared to those who study the financial statements of private commercial companies (FAF, n.d). This means that basic accounting rules and regulations do not effectively establish the necessary standards for government entities, so the GASB is responsible for ensuring that guidelines are established that apply to all government institutions, as well as users of the reports.

While the GASB is subject to the oversight of the FAF Board of Trustees, the Government Accounting Standards Board is an independent and autonomous body. This means that the board cannot be influenced by people in government or by stakeholders in the business and accounting sectors (GASB, 2020). The GASB is not a replaceable organization, as it is impartial and objective, and seeks to be transparent and open, as well as encourages public participation in the formulation of its standards and GAAP in particular.

Problem 1: The following questions in relation to the post above: Looking back that the GASB Concept Statements there are 6 statements listed. If you just got a job at your local city and were new to governmental accounting, which concept statement do you think provides the greatest guidance on the purpose of these standards and why?