Congress to Create Federal Accounting Standards Board

2. Create an independent federal financial accounting standards board

Create an independent federal financial accounting standards board with
the power to develop, publish, and interpret accounting principles and
standards for the federal government, if a comprehensive set of
accounting standards is not issued within 18 months.

The FASAB chair should report to the Vice President by December 1994 on
the status of the issuance of a comprehensive set of accounting
standards. Should that report conclude that issuance of those standards
will not be within the 18 months required, OMB, in consultation with
Treasury and GAO, should prepare legislation by March 1995 to establish
an independent board to set accounting standards. This board would be
structured so as to not to conflict with the constitutional division of
powers between the executive and legislative branches.

This legislation should support the traditional division of powers
between the executive and legislative branches by allowing an
independent board to issue standards; OMB, the Department of the
Treasury, and agencies to implement them; and GAO and inspectors general
to audit against those standards.

Where relevant, the legislation should consider adoption of the current
board structure for membership, process, and operation. Also, it should
consider any relevant existing structures, such as GASB and FASB, which
independently issue accounting standards for state and local governments
and public corporations.