Standard Setting When the Accounting Principles Board was founded in 1959, it planned to establish financial accounting standards using empirical research and logical reasoning only; the role of political action was little recognized at that time. Today, there is wide acceptance of the view that political action is as much an ingredient of the standard setting process as is research evidence. Considerable political and social influence is wielded by user groups—those parties who are most interested in or affected by accounting standards. Two basic premises of the Financial Accounting Standards Board (FASB) are (1) that it should be responsive to the needs and viewpoints of the entire economic community, and (2) that it should operate in full view of the public, affording interested parties ample opportunity to make their views known. The extensive procedural steps employed by the FASB in the standard setting process support these premises.
Write a brief report that describes why financial accounting standards inspire or encourage political action and social involvement during the standard setting process.