1. Structural Comparison and Governance
The global financial reporting landscape is governed by two primary independent bodies: the Financial Accounting Standards Board (FASB) in the United States and the International Accounting Standards Board (IASB) globally.
  • FASB Structure: Operating under the oversight of the Financial Accounting Foundation (FAF) and regulated by the Securities and Exchange Commission (SEC), the FASB issues Accounting Standards Codification (ASC) updates.
  • IASB Structure: Operating under the IFRS Foundation, the IASB issues International Financial Reporting Standards (IFRS).

While the FASB answers to a single sovereign regulator (the SEC), the IASB relies on a voluntary compliance mechanism coordinated through the International Organization of Securities Commissions (IOSCO) and individual jurisdictional endorsement boards (e.g., the European Financial Reporting Advisory Group – EFRAG).
[SEC] ─── (Oversight) ───► [FAF] ───► [FASB] ───► Accounting Standards Codification (ASC)
[IOSCO] ── (Endorsement) ─► [IFRS Foundation] ───► [IASB] ───► International Financial Reporting Standards (IFRS)

2. Standard-Setting Processes
Both boards follow an exhaustive, transparent “due process” designed to ensure public input:
  1. Agenda Consultation: Identification of financial reporting issues based on stakeholder feedback.
  2. Discussion Paper (DP): Optional initial research document outlining the issue and potential accounting approaches.
  3. Exposure Draft (ED): Mandatory public draft showing the precise proposed rule language. This is subject to a public comment window (typically 60 to 120 days).
  4. Accounting Standards Update (ASU) / IFRS Standard: Final issuance following comment analysis, public roundtables, and board voting.

 
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