AN OVERVIEW
The Financial Accounting Standards Advisory Council, FASAC or “the Council” for short, was formed in 1973 concurrent with the establishment of the Financial Accounting Standards Board (the FASB or the Board).
The primary function of FASAC is to advise the Board on issues related to projects on the Board’s agenda, possible new agenda items, project priorities, procedural matters that may require the attention of the FASB, and other matters as requested by the chairman of the FASB. FASAC meetings provide the Board with an opportunity to obtain and discuss the views of a very diverse group of individuals from varied business and professional backgrounds.
The members of FASAC are drawn from the ranks of CEOs, CFOs, senior partners of public accounting firms, executive directors of professional organizations, and senior members of the academic and analyst communities, all with an interest in the integrity of full and complete financial reporting and disclosure.
CARRYING OUT THE MISSION
It is the job of the FASB to establish the “generally accepted accounting principles,” or GAAP, to which public financial reporting by U.S. corporations must conform and to keep those principles current.
In conducting its activities, the Board strives to carefully weigh the views of its constituents, who include all those with an interest in financial reporting, including users, preparers, and auditors of financial reports. The Council provides an important sounding board to help the FASB understand what constituents are thinking about a wide range of issues.
FASAC’s role is not to reach a consensus or to vote on the issues that it considers at its meetings. Rather, FASAC operates as a window through which the Board can obtain and discuss the representative views of the diverse groups the FASB affects. Thus, FASAC provides the forum for two-way communication. For this reason, it is important to convene the Council members as a group so that the Board can hear the individual views of those members and so that the members can hear and respond to each other’s views.
Members of FASAC are urged to speak out publicly on matters before the FASB and also to be supportive of the Board’s process and the principle of private-sector standard setting. Individual Council members are not expected to agree with the Board’s decisions on all of the technical aspects of the projects on the Board’s agenda, but it is important that FASAC members support the institution and its due process.
STRUCTURE OF THE ORGANIZATION
FASAC is an operating arm of the Financial Accounting Foundation, an organization that is independent of any other business or professional organization. The Foundation is run by a Board of Trustees who are leaders in the business, accounting, financial, government, and academic communities.
The Foundation selects the members of FASAC, including the chairman, and broadly oversees its operations. The Council comprises approximately 35 members who represent a broad cross section of the Board’s constituency. They are appointed for a one-year term and are eligible to be reappointed for three additional one-year terms. The FASAC Chairman may be appointed for such term as the Trustees determine.
THE PROCESS
The Council meets once a quarter at the FASB’s offices in Norwalk, Connecticut. Like the FASB, FASAC is committed to following an open, orderly process that is open to public observation. In addition to the Council members, the members of the FASB, its technical director, several members of the FASB’s staff, and a representative from the SEC attend each meeting.
ADDITIONAL INFORMATION
FASAC Operating Procedures set forth procedures for FASAC in its mission of advising the FASB. If you would like more detailed information about FASAC, call or write:
Michael M. Morrow, Chairman or Alicia A. Manders, Executive Director, FASAC
Financial Accounting Standards Advisory Council
801 Main Avenue
P.O. Box 5116
Norwalk, CT 06856-5116
Phone: (203) 847-0700
FAX: (203) 849-9714
Email: aamanders@fasb.org