Which organization is responsible for setting GAAP for the federal government?

The Financial Accounting Standards Advisory Board (FASAB) is the organization specifically tasked with establishing Generally Accepted Accounting Principles (GAAP) for federal government entities. FASAB was created to improve the accounting and financial reporting standards applied by federal agencies, ensuring consistency and transparency in the federal financial statements. By establishing these standards, FASAB helps to enhance the accountability and transparency of the government's financial reporting, allowing for more informed decision-making by citizens, stakeholders, and policymakers.

This is crucial in the federal context because GAAP principles are tailored to meet the unique needs of governmental entities, which can differ significantly from those of private sector organizations. FASAB's standards therefore incorporate considerations such as fund accounting and the accountability required of public entities. They ensure that users of federal financial statements have accurate and relevant information about the financial condition and performance of the federal government.