What organization defines GAAP for state and local government entities?

The Governmental Accounting Standards Board (GASB) is the organization that establishes Generally Accepted Accounting Principles (GAAP) specifically for state and local government entities. GASB plays a crucial role in ensuring that financial reporting for governmental entities is consistent, transparent, and accountable to the public.

GASB develops standards that address various aspects of public sector accounting and financial reporting, including the recognition of revenue, the reporting of expenditures, and the overall presentation of financial statements. By providing these guidelines, GASB helps ensure that state and local governments report their financial position and operations in a manner that is understandable and comparable across jurisdictions.

This is particularly important in the governmental context, as these entities often have different operational structures and funding sources than private sector organizations, which are governed by the Financial Accounting Standards Board (FASB). The other organizations listed, such as the International Auditing and Assurance Standards Board (IAASB) and the Office of Management and Budget (OMB), have their own specific responsibilities and focus areas that do not encompass the establishment of GAAP for state and local governments.