What entity does the Financial Accounting Standards Board (FASB) serve?

The Financial Accounting Standards Board (FASB) primarily serves private sector entities by establishing and improving financial accounting and reporting standards. These standards are essential because they provide a framework for how companies should prepare and present their financial statements, ensuring consistency, transparency, and comparability which are crucial for investors, creditors, and other stakeholders in the business community.

The work of the FASB is especially significant in the context of private enterprises, including corporations and small businesses, as these entities rely on the standards set by FASB to communicate their financial performance effectively. This is particularly relevant to investors and other external parties who utilize these financial statements for decision-making.

While FASB's standards can also have implications for non-profit organizations and local governments due to the interconnected nature of financial reporting and economic activities, its main focus and authority lie in the private sector, allowing them to maintain a consistent approach to financial reporting that enhances clarity and reliability in the marketplace.