GASB, organized in 1984, has issued 38 standards and two concepts statements, Objectives of Financial Reporting and Accounting for Service Efforts and Accomplishment Reporting. A recent standard, GASB Statement No. 34, requires sweeping changes in the way financial reports are reported.

Codification of Governmental Accounting and Financial Reporting Standards contains generally accepted accounting principles for governmental units and is issued annually.

accounting principles (GAAP). In order for accountants to know which financial reporting standards have primacy when there are multiple possibilities, the AICPA has published a hierarchy of applicable accounting principles referred to as the "GAAP hierarchy."4 The GAAP hierarchy is directed at nongovernmental entities that look primarily to the FASB for financial reporting standards and at governmental entities that look primarily to the GASB for financial reporting standards. Generally, nongovernmental entities follow FASB pronouncements, APB Opinions, and AICPA Accounting Research Bulletins, while state and local governments follow GASB pronouncements and AICPA and FASB pronouncements if they are made applicable to state and local governments by GASB action.

4 Statement on Auditing Standards No. 69, The Meaning of "Present Fairly in Conformity with Generally Accepted Accounting Principles" in the Independent Auditor's Report (New York: American Institute of Certified Public Accountants, Jan. 1992).

Exhibit 15-3

Authorities for Commercial, Governmental, and Not-for-Profit Accounting Reporting Standards

Type of Entity

Primary Financial Reporting Standard Setter(s)

Business enterprises

Financial Accounting Standards Board (FASB) and Securities and Exchange Commission (SEC)

Federal government

General Accounting Office (GAO), Comptroller General, Department of the Treasury, Office of Management and Budget (OMB), and Federal Accounting Standards Advisory Board (FASAB)

State/local governments

Governmental Accounting Standards Board (GASB)

Colleges and universities

Public—GASB Private—FASB

Heathcare Organizations

Public—GASB Private—FASB

Voluntary health and welfare organizations

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