What organization establishes International Financial Reporting Standards (IFRS)?

What organization establishes International Financial Reporting Standards (IFRS)?

• A. European Financial Reporting Council
• B. International Accounting Standards Board (IASB)
• C. Financial Accounting Foundation
• D. American Institute of CPAs (AICPA)

Answer: (B)

The International Accounting Standards Board (IASB) is responsible for establishing International Financial Reporting Standards (IFRS). The IASB is an independent organization that develops and maintains a comprehensive set of accounting standards that promote transparency, accountability, and efficiency in financial reporting across global markets.

IFRS provides a common accounting language, making it easier for businesses and investors to compare financial statements from different countries. The IASB undertakes this responsibility by working with various stakeholders, including regulators, the accounting profession, and the business community, to create standards that are relevant to the global economy.

Other organizations mentioned play different roles in the accounting and financial reporting landscape, but none are charged with establishing IFRS like the IASB. For example, the Financial Accounting Foundation provides oversight for the Financial Accounting Standards Board in the United States but does not deal with international standards. Similarly, the European Financial Reporting Council and the American Institute of CPAs have specific roles but do not set IFRS.