The charter gives the FASB exclusive authority to set its own agenda and establish accounting standards. Although independence can never be totally assured, the FASB charter did attempt to protect the board from as much external pressure as possible. The three pillars on which the FASB was built are independence, openness (or sunshine), and neutrality. The usual composition of the board is three members with extensive public accounting experience, two from a corporate background, one academic, and one financial analyst. The board consists of seven full-time members. The FASB is funded by revenues from the sales of its publications and by voluntary contributions, primarily from public accounting firms and corporations. That new group was the Financial Accounting Standards Board (FASB). This led to the creation in 1973 of a new standard-setting body designed to be independent of all other business and professional organizations. Largely as a result of criticisms concerning the perceived lack of independence of the APB and the part-time involvement of its members, a major reconsideration of the standard-setting structure in the United States occurred in the early 1970s. Pronouncements issued by those two bodies are considered to be generally accepted accounting principles (GAAP) unless they have been specifically amended or replaced by a subsequent pronouncement. Both organizations were committees of the American Institute of Certified Public Accountants (AICPA) and included approximately twenty representatives of the accounting profession who served on a part-time basis. The first two standard-setting organizations in the United States were the Committee on Accounting Procedure (CAP), which was established in 1938, and the Accounting Principles Board (APB), which replaced the CAP in 1959. Although the federal government's Securities and Exchange Commission (SEC) has the legal authority to establish accounting standards for public companies, the SEC has historically looked to the private sector to set accounting standards. An error is pervasive if it is material to more than one of the primary financial statements.The United States has a longstanding tradition of accounting standards being set by the private sector as opposed to the government. PERVASIVE is having the ability to permeate. Thereby causing a variance between recorded labor costs and actual payroll, e.g., project costs are not recorded, reimbursable costs are not billed, and program and project managers are unable to accurately monitor their budgets or do projections. The effect being wages being paid without direct assignment of labor charges to those areas or projects to which the labor hours were expended. The largest contributing factor to payroll variance is usually employees not submitting project oriented timesheets, or supervisors failing to approve those submitted timesheets. PAYROLL VARIANCE is the difference between actual salaries and 'unloaded' labor expenditures. APB was the main organization setting the US GAAP and its opinions are still an important part of it. The APB mission was to develop an overall conceptual framework of US generally accepted accounting principles (US GAAP). The APB was created by American Institute of Certified Public Accountants (AICPA) in 1959 replaced by Financial Accounting Standards Board (FASB) in 1973. ACCOUNTING PRINCIPLES BOARD (APB) OPINIONS were published by the Accounting Principles Board (APB).
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