How Does the FASB Make Decisions? A Descriptive Study of Agenda Setting and the Role of Individual Board Members

59 Pages Posted: 28 Jan 2017 Last revised: 28 Jul 2017

See all articles by John (Xuefeng) Jiang

John (Xuefeng) Jiang

Michigan State University

Isabel Yanyan Wang

Michigan State University

Daniel Wangerin

Wisconsin School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: July 27, 2017


This study provides descriptive evidence about how the Financial Accounting Standards Board (FASB) sets Generally Accepted Accounting Principles (GAAP). Based on 211 financial accounting standards issued between 1973 and 2014, we report the reasons that the FASB adds or removes projects from its agenda, the parties most frequently bringing issues to the FASB’s attention, and commonly recurring topics across different standards over time. We find that reducing diverse practices and inconsistent guidance is the most frequent reason cited by the FASB to take on a project and more than half of the standards are intended to enhance comparability. We find that the SEC, AICPA, and large public accounting firms are identified most frequently by the FASB as the parties bringing issues to its attention. Accounting for financial instruments is the most frequent recurring topic across accounting standards, which potentially explains the growth in fair value measurement in U.S GAAP over time. We analyze the dissenting opinions written by Board members and find some evidence that the stated reasons for disagreements are associated with their professional backgrounds. However, our analyses indicate Board members’ positions on fair value accounting are context-specific and cannot be fully explained by their professional backgrounds.

Keywords: the Financial Accounting Standards Board, the FASB, accounting standards, standard-setting, agenda, fair value, individual differences

JEL Classification: D78, M41, M48, M50

Suggested Citation

Jiang, John (Xuefeng) and Wang, Isabel and Wangerin, Daniel D., How Does the FASB Make Decisions? A Descriptive Study of Agenda Setting and the Role of Individual Board Members (July 27, 2017). Available at SSRN: or

John (Xuefeng) Jiang (Contact Author)

Michigan State University ( email )

632 Bogue St Ste N505
Eli Broad College of Business
East Lansing, MI 48824
United States
517-432-3031 (Phone)
517-432-1101 (Fax)


Isabel Wang

Michigan State University ( email )

N233 Business Complex
Broad School of Business
East Lansing, MI 48824-1122
United States


Daniel D. Wangerin

Wisconsin School of Business ( email )

975 University Avenue
4104 Grainger Hall
Madison, WI 53706
United States

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