Which entity oversees the standards for auditing and accounting practices in the U.S.?

The Financial Accounting Standards Board (FASB) is responsible for establishing accounting standards in the U.S. It plays a crucial role in developing and communicating financial accounting and reporting standards that govern the preparation of financial statements. FASB's standards are important for ensuring consistency, transparency, and accountability in financial reporting.

FASB's authority extends to the creation of Generally Accepted Accounting Principles (GAAP), which provide the backbone for accounting practices among public and private companies. An understanding of FASB's role is essential for anyone studying accounting, as it ensures that financial information is presented in a way that facilitates decision-making by investors, creditors, and other stakeholders.

In contrast, while entities like the IRS and SEC have significant regulatory functions related to finance and compliance, they do not specifically set the accounting standards themselves. The AICPA primarily focuses on the profession of accountancy and the development of professional standards for auditors, rather than the standards of financial accounting directly as FASB does.