Certified Government Financial Manager (CGFM) Practice Exam

The Federal Accounting Standards Advisory Board (FASAB) is the entity responsible for establishing Generally Accepted Accounting Principles (GAAP) specifically for the federal government. This organization was created to improve federal financial management, reporting, and accountability. FASAB develops accounting standards that govern the financial reporting of federal agencies, ensuring consistency and transparency in governmental financial practices.

Their role is essential because federal accounting differs from business accounting due to the nature of government operations, funding sources, and accountability requirements. This means that the standards they set aim to address the unique aspects of federal financial reporting, including the need for budgetary integrity and the reporting of non-financial information.

The other entities mentioned, while related to accounting standards, do not specifically define GAAP for the national government. Understanding the role of FASAB helps clarify the framework within which federal financial statements are prepared and reviewed, thereby supporting effective governance and public trust in government financial operations.