What role do the U.S. Department of the Treasury, GAO and OMB have in the standard-setting activities of FASAB?

The Federal Accounting Standards Advisory Board (FASAB) was established in 1990 by the U.S.

Department of the Treasury, the Office of Management and Budget (OMB), and the Government

Accountability Office (GAO). These three entities are collectively known as the “sponsors” of FASAB.

Each has a representative who serves as a voting member of the board.

FASAB is responsible for establishing GAAP for federal entities. The sponsor organizations appoint

board members and have authority over standard-setting governance, but do not individually veto

standards. Final standards are issued only after due process, including public comment and sponsor

approval.

Relevant Standards and Reference:

FASAB Memorandum of Understanding (MOU) Among Treasury, OMB, and GAO (as amended):

“These three agencies are the sponsors of FASAB and each appoints one voting member to the

Board.”

FASAB Governance Manual (2023 Edition), Section 2: Identifies Treasury, OMB, and GAO as sponsors

and voting members.

AGA’s “CGFM Study Guide 2,” Chapter 2: Highlights the role of sponsors in the standard-setting

process.

Therefore, Option D is correct.