The Financial Accounting Foundation said it would conduct post-implementation reviews of financial accounting and reporting standards issued by the two boards it oversees, the Financial Accounting Standards Board and the Governmental Accounting Standards Board.
The new FAF process is designed to be independent of the standard-setting process of FASB and GASB. This design will also ensure the continued autonomy of the accounting standard-setting process of the two boards. The FAF review staff will study significant accounting standards to assess whether the intended financial reporting objectives underlying those standards are being met.
The review staff will report to the trustees and FAF president, but members will be drawn from experienced FASB and GASB staff to promote a collaborative review process aimed at improving the standard-setting process. The review staff will test the initial review process by selecting one FASB and one GASB standard. The FASB test is expected to be completed by midyear 2011.
In July, the FAF announced that Mark Schroeder would lead the development, implementation, and management of the post-implementation review of standards and other authoritative pronouncements issued by the FAF’s standards boards.
“An important part of the FAF trustees’ responsibilities is overseeing the effectiveness of the FASB and GASB in carrying out their missions and for protecting the independence and integrity of the boards’ standard-setting process,” said FAF Chairman John J. Brennan in a statement. “The new post-implementation review process strikes the appropriate balance of these responsibilities and will provide a vitally important mechanism for obtaining ‘real world’ feedback and analysis on the application, usefulness, and effectiveness of standards set by our boards.”
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