The full form of FAF in accounting is the Financial Accounting Foundation.
The Financial Accounting Foundation (FAF) is a critical organization within the accounting landscape. It plays an oversight role and is responsible for the administration, financing, and appointment of members to two key standard-setting boards in the United States:
- Financial Accounting Standards Board (FASB): Establishes accounting and reporting standards for U.S. companies that are public and private, as well as not-for-profit entities.
- Governmental Accounting Standards Board (GASB): Sets accounting and financial reporting standards for U.S. state and local governments.
The FAF ensures that both the FASB and GASB operate independently and objectively, producing standards that lead to transparent and reliable financial information. It accomplishes this through its structure and its oversight responsibilities. The FAF is funded by accounting support fees, publications, contributions, and investment income.
In summary, the FAF is the umbrella organization providing oversight and resources to the standard-setting bodies that shape accounting practices in the U.S., specifically the FASB and GASB.
