Written by: Adam Bergstrom, CPA
In November 2022, the Board of Trustees of the Financial Accounting Foundation (FAF) published its new strategic plan, developed on the results of hundreds of surveys and 50 hours’ worth of interviews with leaders and members within diverse stakeholder groups. This revised plan seeks to reflect the activities and responsibilities of the FAF’s Board of Trustees and staff, and maintains a focus on six primary goals. Each goal is comprised of several key objectives that the FAF will aim to achieve. In order to execute this plan, FAF will continue working closely with the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB).
What is the Financial Accounting Foundation?
The FAF is an independent, private-sector, not-for-profit organization established in 1972. Its Board of Trustees is responsible for the oversight, administration, financing, and appointment of the FASB and GASB. Together, these Boards are tasked with continuously establishing and improving financial reporting standards in the United States – otherwise known as Generally Accepted Accounting Principles (GAAP).
“Our mission is, through governance and oversight, to ensure that the Financial Accounting Standards Board and the Governmental Accounting Standards Board establish and improve high-quality financial accounting and reporting standards that provide information useful in decision making to investors and other users of financial reports, and improving all stakeholders’ understanding of those standards and preparers’ ability to implement them effectively.” – Kathleen Casey (Chair) & John Auchincloss (Executive Director)
“In service to the public interest, promote the importance of independent standard setting to capital markets.”
- Engage regularly with regulators and policymakers.
- Collaborate with stakeholder groups as well as international standard-setting bodies.
- Facilitate regular updates by the Boards about current and pending projects to policymakers.
- Continually review and assess governance and oversight practices to ensure they align with the mission and vision.
“Ensure financial accounting and reporting standards advance as needed.”
- Maintain ongoing dialogue with the Boards about their methods to advance financial accounting and reporting standards to keep information in financial reports decisions useful, including cost and benefits.
- Support the Boards’ efforts to solicit input on the continuing decision usefulness of GAAP-based information.
- Ensure the Boards have the resources needed to evaluate how stakeholders use emerging technologies to capture and analyze information.
- Monitor the Boards’ effort to use clear language in financial accounting and reporting standards and accompanying educational materials.
“Incorporate new and further embrace existing technologies to make the standard-setting process more effective and productive, from initial stakeholder input through the delivery and consumption of standards.”
- Oversee and support the Boards as they evaluate how to use technology throughout the standard-setting process.
- Regularly incorporate a discussion of technology into meetings with the Board chairs.
“Build on our commitment to greater diversity, equity, and inclusion.”
- Expand recruiting efforts to identify talent that will make organizations more diverse.
- Ensure that the Boards’ stakeholder outreach is broad and inclusive.
- Develop employee training programs to build a more inclusive culture across the entire organization.
- Increase relationships with educators, educational institutions, and organizations that encourage minority students to pursue careers in accounting.
“Exhibit leadership in global financial reporting.”
- Expand dialogue with the Trustees of International Financial Reporting Standards Foundation (IFRSF).
- Hold a regular discussion with Board chairs about international accounting and reporting issues.
- Ensure that the Boards are attentive to opportunities for international convergence of financial accounting and reporting standards.
“Engage with stakeholders, regulators, and Congress to determine the appropriate way, if any, for the organization to contribute to future sustainability reporting.”
- Continue to assess the landscape around sustainability reporting.
- Maintain an active dialogue with the Boards about what they are learning about evolving sustainability
- Ensure that the Boards remain informed about the evolving interplay between GAAP and sustainability information needs of investors and financial report users.
- Monitor and engage with the IFRSF, the SEC, and others involved in sustainability reporting.
This independent review process when it comes to U.S. financial accounting and reporting standards is crucial to providing investors and other financial statement users with information critical for decision-making throughout the capital markets. This stresses the importance of an effective strategic plan developed by the FAF to support the FASB and GASB. The Board of Trustees of the foundation will continue to evaluate progress and keep stakeholders updated on at least an annual basis.