Page 19 - FINAL CFA SLIDES DECEMBER 2018 DAY 7

Session Unit 6:
23. Financial Reporting Standards

LOS 23.a: Describe the objective of financial statements and the importance of financial
reporting standards in security analysis and valuation, p. 25

We need standards to provide consistency in how different entities measure their

performance as these are used for valuation and in making investment decisions.

LOS 23.b: Describe roles and desirable attributes of financial reporting standard-setting bodies and
regulatory authorities in establishing and enforcing reporting standards, and describe the role of the

International Organization of Securities Commissions. p 26.

Standard-setting bodies are professional organizations of accountants and auditors that

establish financial reporting standards.

Regulatory authorities are government agencies that have the legal authority to

enforce compliance with financial reporting standards.

2 Key Standard Setting Bodies:

• Financial Accounting Standards Board (FASB) - GAAP for USA;

• International Accounting Standards Board (IASB) - IFRS for outside USA;