Explain the role of the FASB in monitoring and controlling busines Assignment

Explain the role of the FASB in monitoring and controlling busines repotring and practices in the modern organization - Assignment Example These reports are verified by such interest groups from time to time in order to oversee whether or not companies are using their funds and resources well. These reports are of significant importance to investors who take valuable decisions related to investment and financing. These reports reflect flow of fund in and out of the business. They reveal how a firm is utilizing its assets so as to facilitate sufficient productivity and revenue. The different standards established by the organization help companies to develop and maintain a well-structured accounting system (Whittington, 2008). FASB has adequate power to formulate different policies, but the organization does not have rights to impose them upon the companies. Enforcement of accounting standards falls under the jurisdiction of SEC. The standards set by the FASB are required to be followed by public companies in maintaining their books of accounts and financial statements. So, the organization acts as a leader to different corporate entities. The FASB takes necessary advice from SEC and American Institute of Certified Public Accountants (AICPA) for formulating or improving the different accounting standards. FASB is not required to consult with any business organization before setting accounting standards. Hence, the organization has superior authority over ways whereby companies maintain their accounts and financial reports (King, 2006). The primary motive of standards established by the FASB is to ensure that organizations can develop their financial reports in such a manner that different interest groups can develop correct perceptions about organization’s financial structure. This facilitates stakeholders to make informed decisions. The standards are developed in a way, which promotes transparency in management of funds in a company and corresponding disclosure in the reports. The set