Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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Which organization issues financial reporting standards?

Financial Accounting Standards Board
International Accounting Standards Board
Accounting Standards Board
Financial Reporting Review Panel

The correct answer is: Accounting Standards Board

The organization that issues financial reporting standards plays a critical role in ensuring consistency, transparency, and comparability in financial statements across entities and borders. In this context, the International Accounting Standards Board (IASB) is the globally recognized authority responsible for developing and promoting International Financial Reporting Standards (IFRS). These standards are designed to bring about consistency in financial reporting on a worldwide basis, facilitating the comparison of financial statements of companies across different jurisdictions. While it's true that various organizations contribute to accounting standards at regional or national levels, such as the Financial Accounting Standards Board (FASB) in the United States or different Accounting Standards Boards in other regions, the IASB holds a prominent position in the global landscape of financial reporting standards. The Financial Reporting Review Panel's role is more about reviewing the financial statements rather than issuing standards, which distinguishes its function from that of the IASB. Understanding the primary organizations involved in standard-setting helps contextualize the rules and guidelines that dictate how financial transactions and events should be reported.