Discuss AGA GAFRB Exam Topic 1 Question 15

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

AThey are all non-voting advisory board members of FASAB.

BThey are all members with authority to veto any standard approved by FASAB.

CThey are all members whose agencies may be exempt from FASAB standards.

DThey are all sponsors and voting members of FASAB.

Suggested Answer: D

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.

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12 comments · newest first

Suzi 3 months ago

I lean towards B. They should have veto power over standards.

Lashon 3 months ago

I feel like A makes sense. Non-voting advisory roles fit them.

Hillary 3 months ago

I think it's D. They are sponsors and voting members.

Ahmad 3 months ago

I thought they had more power than that.

Tiara 3 months ago

Yep, advisory roles only!

Coral 4 months ago

Wait, are they really non-voting? That seems odd.

Art 5 months ago

Totally agree with that!

Alease 5 months ago

They are all non-voting advisory board members of FASAB.

Anthony 6 months ago

I believe they are all part of the advisory board, but I’m not certain if they have voting rights or if they can veto standards.

Sang 6 months ago

I’m a bit confused about whether they have veto power or not. I thought they were involved in the process but not with that level of authority.

Theresia 6 months ago

I feel like I saw a question similar to this in practice, and it mentioned them being sponsors, but I can't recall the exact details.

Levi 6 months ago

I think I remember that the Treasury, GAO, and OMB have some sort of advisory role, but I'm not sure if they are voting members or not.

AGA GAFRB Exam - Topic 1 Question 15 Discussion