Which board specifically develops standards for not-for-profit and state and local governments?

Which board specifically develops standards for not-for-profit and state and local governments?

• A. Financial Accounting Standards Board
• B. International Accounting Standards Committee
• C. American Institute of Certified Public Accountants
• D. Governmental Accounting Standards Board

Answer: (D)

In the United States, different sectors have their own standard setters, and the board that focuses on government-related entities is the one that writes accounting and financial reporting rules for state and local governments. This board specifically develops standards for governmental entities, including issues unique to government financial reporting. That’s why it’s the correct choice. The other options serve different roles: the Financial Accounting Standards Board sets standards for for-profit entities (and many not-for-profits), the International Accounting Standards Committee (now IFRS Foundation) handles international standards, and the American Institute of Certified Public Accountants is a professional body, not a standard setter.

In the United States, different sectors have their own standard setters, and the board that focuses on government-related entities is the one that writes accounting and financial reporting rules for state and local governments. This board specifically develops standards for governmental entities, including issues unique to government financial reporting. That’s why it’s the correct choice.

The other options serve different roles: the Financial Accounting Standards Board sets standards for for-profit entities (and many not-for-profits), the International Accounting Standards Committee (now IFRS Foundation) handles international standards, and the American Institute of Certified Public Accountants is a professional body, not a standard setter.