Certified Government Financial Manager (CGFM) 2025 – 400 Free Practice Questions to Pass the Exam

The Governmental Accounting Standards Board (GASB) was established in 1984 to create and improve accounting standards for state and local governments in the United States. It replaced the Financial Accounting Standards Board (FASB) in terms of the focus on governmental entities. While the FASB is responsible for establishing financial accounting and reporting standards for private-sector organizations and publicly traded companies, GASB was specifically designed to address the unique needs and situations of government entities, which often operate under different financial reporting frameworks and requirements. This distinction is critical for the accurate reporting and accountability of public funds, which contributes directly to the effective governance and transparency demanded by citizens and stakeholders.

The establishment of GASB was a significant step in ensuring that governmental financial reporting adheres to consistent standards, thus enhancing the quality and comparability of financial statements for government entities, which ultimately aids in better informed decision-making by stakeholders.