Which organization was responsible for creating accounting standards before FASB?

The American Institute of Certified Public Accountants (AICPA) played a significant role in establishing accounting standards prior to the formation of the Financial Accounting Standards Board (FASB). The AICPA developed the Generally Accepted Accounting Principles (GAAP) through its committee on Accounting Principles, particularly by issuing Statements on Auditing Standards (SAS) and other guidance that helped shape accounting practices.

The transition to FASB in the 1970s represented a move toward a more independent standard-setting body, designed to enhance the consistency and reliability of financial reporting. While GAAP refers to the actual accounting principles and standards that dictate how financial statements are prepared, the AICPA was the organization that laid much of the groundwork for these principles before FASB took over the responsibility.

Understanding this historical transition helps clarify the relationship between these organizations and their roles in the evolution of accounting standards.