Final answer:
The Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) issue standards relevant to both internal and external financial reporting. The American Institute of CPAs and the Federal Accounting Standards Advisory Board focus on other aspects of accounting and auditing standards. Ensuring accurate financial information is a fundamental aspect of corporate governance, with boards of directors, auditing firms, and investors playing key roles.
Step-by-step explanation:
Among the organizations mentioned, the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) are primarily responsible for issuing standards that focus on both internal and external financial reporting. The FASB develops accounting standards for private sector organizations, which are crucial for investors and other users of financial reports to make well-informed decisions. The GASB provides standards for state and local governments in the United States. In contrast, the American Institute of CPAs (AICPA) is an organization that sets ethical standards for the profession and U.S. auditing standards for audits of private companies, non-profit organizations, and governments. The Federal Accounting Standards Advisory Board (FASAB) is responsible for establishing accounting standards for U.S. federal entities.
These organizations are part of a broader ecosystem of corporate governance, including the board of directors, auditing firms, and outside investors, which are supposed to ensure that a company provides accurate financial information to its shareholders and the public. Despite these oversight mechanisms, there have been notable failures in corporate governance, such as the case with Lehman Brothers, signaling the complexity and importance of accurate financial reporting and standard setting in the business environment.