These modest words foreshadowed consequential changes to the process for creating and improving financial accounting standards for the world’s largest capital market. Two generations later, it is our privilege to celebrate the 50^th anniversary of these changes, and to reflect on how we at the Financial Accounting Foundation (FAF) can continue to fulfill our lofty mission.

The FAF’s first order of business was to establish, in 1973, the Financial Accounting Standards Board (FASB), an independent, full-time, expert body dedicated to setting standards for financial accounting for public and private companies, nonprofits and employee benefit plans. The success of FASB’s work and its robust, inclusive standard-setting process led to the creation in 1984 of a companion board, the Governmental Accounting Standards Board (GASB), to establish accounting standards for state and local governments. Under FAF oversight, the FASB and GASB produce, and continue to refine, comprehensive and useful financial accounting standards that have served and continue to serve as a model for the global community.

This model—expert boards operating independently, representing diverse perspectives, appointed and overseen by the Financial Accounting Foundation—has served stakeholders well. Investors, lenders, and other users of financial statements not only receive the benefits of useful, comparable and verifiable financial information, they also participate in the standard-setting process alongside academics, accounting firms, regulators, and the companies, governments, nonprofit organizations and others who produce financial statements. Everyone has a seat at the table and the chance to express their views. This inclusiveness is central to the creation and use of Generally Accepted Accounting Principles, or GAAP.

The entire FAF staff and Board of Trustees understand just how important it is to safeguard the independent standard-setting process, and to provide the boards with the tools they need to continue their vital work. We are investing in new technologies to make it easier for the boards to draft and publish their standards; broadening our search for talent to capture a greater diversity of expertise and experience; experimenting with new ways for stakeholders to provide feedback through our communications channels; and, later this year, updating our office space to make it even easier to welcome visitors into the standard-setting process, either in person or virtually.

We are honored to mark this important milestone in FAF history, and to continue to support our standard-setting boards as they, and we, collectively fulfill our mission to establish and improve financial accounting standards for the world’s largest capital market.
 


John W. Auchincloss